EUR/AUD hasn’t gone much of anywhere all Summer, trading in a small range between 1.4450 – 1.4900 since July. In the last couple of weeks, the pair has tested the top of the range and the bulls just didn’t have the juice to push the pair higher, making this a potential opportunity for the bears to take back control.
With lower “highs” in the last week and a potential break down of the strong level of interest at 1.4775 (and falling moving averages), the bears could see this as a high reward-to-risk opportunity to aim for the bottom of the Summer range.
GBP/CHF bulls have made a big comeback in August, breaking a falling trendline that goes back to the beginning of July. The break seems to have held and we may be at the start of another leg higher.
Stochastic is showing short-term oversold conditions so the current dip may be a shallow one, but be aware though that 1.2900 is a previous strong level of interest that may draw resistance. If the bulls win out there, we may not see resistance again until the July swing higher around 1.3200, giving the bulls a nice potential return-on-risk in the short-term.
Volatility has dropped all summer long in the forex markets, and the symmetrical triangle in NZD/CHF is another textbook example of that. .7050 seems to be the line in the sand drawing the market back after a dip or rally, and recently it has held as support, which makes sense given that the longer-term uptrend is higher.
Consolidation patterns can last a while, so it’s tough to tell when/if we’ll see a breakout. But it’s good to keep a close eye on these patterns as when they find a catalyst to get them moving the moves can fast, making them some of the best trading opportunities around.
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