EUR/AUD has been trading sideways while tapering into a point, forming what appears to be a symmetrical-ish triangle pattern. A symmetrical-ish triangle pattern means that bulls and bears are playing a game of tug-of-war, but neither side has a clear advantage. A breakout could therefore potentially occur in either direction. And if a breakout does occur, then the resulting rally or selloff could potentially last for around 150 pips, based on the height of the chart pattern.
Remember that symmetrical triangle that we identified on USD/JPY’s 1-hour chart last Wednesday? Well, it broke to the upside, so give yourself a pat on the back if you were able to find a trade opportunity. Anyhow, for today’s play, we’re looking for shorting opportunities just in case resistance forms at the 104.00 major psychological level, which is a price area with very significant market interest, even on the higher time frames. Also, stochastic is already signalling overbought conditions, so the bulls may be running out of steam sooner or later. Do note, however, that the moving averages are still in an uptrend, so more conservative forex traders may wanna sit this one out since shorting the pair is a counter-trend setup.
A rising wedge appears to be forming on NZD/CAD’s 1-hour chart, so there’s a good chance that the pair may move lower should a downside breakout occur. And in case a downside breakout does happen, then the down move could potentially last for around 200 pips. And as usual, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, alright?
Forex Chart Settings:
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.