AUD/JPY has recently been trading sideways while tapering to a point. In the process, a fresh symmetrical-ish triangle pattern has emerged for us to play with. A symmetrical-ish triangle means that them bulls and bears are fighting it out, but neither side has a clear advantage. As such, the pair could potentially break in either direction. And if a breakout does occur, then the resulting rally or selloff could potentially last for a whopping 280 pips.
Just keep in mind that an upside breakout needs to clear the 87.50 minor psychological level on strong momentum. Otherwise, the breakout is not valid, which means that there’s a good chance that them bears will stage a counter-attack. For a downside breakout, meanwhile, just make sure to keep an eye on the area of interest around 85.80. And as usual, make sure y’all practice proper risk management, a’ight?
If breakouts ain’t your thing, then how about that there setup for GBP/AUD? As y’all can see, a descending channel has formed for GBP/AUD. And it just so happens that the pair is close to the channel’s resistance area. Y’all therefore better start lookin’ for opportunities to go short. Do note, however, that stochastic is already indicating oversold conditions and all that. There’s therefore a small chance that the pair may stage an upside breakout instead. So if you do find an opportunity to short, just be ready to bail if the pair smashes past the area of interest at 1.6330. Y’all may even wanna switch bias if the momentum of the upside break is really strong.
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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.