AUD/NZD has recently been trading sideways while appearing to taper into a point. And as a result, a symmetrical triangle has began to emerge. A symmetrical triangle means that bulls and bears are duking it out, but neither side has a decisive advantage yet. As such, we don’t really have a directional bias, since the pair could potentially break either to the upside or the downside.
And should a breakout happen sooner or later, then the resulting breakout move could potentially last for about 200 pips. Just make sure to keep an eye on how the pair reacts to 1.1010 and 1.0800 for a topside and downside breakout respectively. You see, if the pair fails to break either price levels on strong momentum, then chances are high that the breakout may get faded and end up being a fakeout.
And for the more gangsta traders out there who are planning to trade within the triangle, just know that the pair is approaching the triangle’s resistance area, which should be around the area of interest at 1,0920. So if you be planning to short within the triangle, that’s the price area to keep an eye on. Stochastic is already signaling oversold conditions and all that, though.
Sound the reversal alert, yo! As y’all can see, a rather messy-looking head-and-shoulders pattern has formed on AUD/CAD’s 1-hour chart. Not only that, the pattern has already been validated since the pattern’s neckline has already been broken.
However, bulls are trying their best to invalidate the pattern. Even so, their attempts appear to be failing since the pattern’s neckline acted as resistance, which sent the pair falling back down again. Bulls ain’t giving up, though. And it looks like they’ve set camp just above 1.0130. As such, y’all may wanna wait until 1.0310 is breached on strong momentum before going short.
And looking at our technical indicators, chances are good that them bears may start an attack soon, since stochastic is pointing back down again after touching the overbought area. Them moving averages, meanwhile, are already in downtrend mode. In any case, just make sure to practice proper risk management, a’ight?
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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.