Let’s end this week’s intraday charts update with a short-term descending triangle on GBP/AUD and a Fibonacci retracement play to take advantage of the trend line break on CAD/JPY.
Is GBP/AUD in for more downside moves? Well, as y’all can see, the pair began encountering sellers after hitting resistance at 1.7630. And all them bulls can do is entrench themselves at 1.7350 and fight back as best they could. And in the process, a descending triangle has formed.
A descending triangle is, as the name implies, a bearish chart pattern, so there’s a higher-than-average chance that them bears may win and push the pair lower. And if the pair does stage a downside breakout, then them bears would likely be gunning for 1.7090 next.
Looking at our technical indicators, we can see that they also favor further moves to the downside. Stochastic, for one, is already signaling overbought conditions and all that. them moving averages, meanwhile, are already in downtrend mode. Also, it looks like the 200 SMA is acting as dynamic resistance.
There’s always a slim chance for an upside breakout, though, so keep an eye on 1.7630. If the pair breaches that on strong momentum, then the topside breakout is confirmed and y’all may wanna think about bailing yo shorts.
As y’all can see, CAD/JPY just recently smashed below that there rising trend line. However, the pair quickly found support and began pulling back to the broken trend line, giving us a break-and-retest scenario to play with.
Our technical indicators look like they favor further downside moves, so we’re mainly bearish on the pair. And using our handy Fibonacci tool, we can see that the pair is currently hesitating at the 50% retracement level. And said retracement level lines up rather nicely with the area of interest at 82.10. There’s therefore a good chance that resistance will form here.
However, it’s also possible that the pair will pull back all the way to the 61.8% retracement level, which is just below the area of interest at 82.50. Do note, though, that if the pair clears 82.50 on strong bullish momentum, then that may be a sign that them bulls are in control. 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.