After an amazing drop over the past few months thanks to Brexit and a flashcrash, GBP/AUD finally took a breather, forming a rising wedge in the process. This pattern in a downtrend often times precedes a move lower, and it looks like that’s what we got today!
Sterling pairs dropped like a rock today, and in GBP/AUD, we not only saw a break in the rising wedge, but also a break in the previous swing lows. There isn’t much support until you get to the 2013 lows around 1.4400, so if this break holds, it could draw in more sellers and see the pair fall apart faster than Donald Trump’s policy team!
AUD/CAD broke above the falling channel I pointed out last week to create a new rising channel higher and even break above the previous swing high area around 1.0150. The stochastic indicator shows the potential that this current run up may be losing steam, so if you’re still a bull on this pair, you may want to wait for a pullback lower. Support could come where we see the bottom of the rising channel line up with the rising moving averages and the previous swing high, making that a high probability technical entry.
Swiss franc longs were swept clean from the market faster than a Hillary Clinton email server, creating this simple technical setup on EUR/CHF. After bouncing higher during the morning London session, it looks like EUR/CHF sellers hopped back in right at the falling moving averages and the top of the channel. The question now is whether or not this area will hold as resistance (Stochastic is pointing to potential overbought conditions), but if it does, the overall trend lower makes a compelling technical argument to draw sellers in.
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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.
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