For today’s intraday charts menu, I’m serving up a couple of short-term chart patterns, with a rectangle on AUD/USD and a descending channel on GBP/JPY.
AUD/USD’s upward surge ended when it encountered resistance at 0.7970. However, them bulls ain’t giving up just set, so they set up camp at 0.7880. As a result, the pair began trading sideways while trapped inside a trading range or rectangle pattern.
If you’re planning to trade within the range, then heads up since the pair is currently on its way up to retest resistance at 0.7970 and is already almost halfway there.
If you’re more of a breakout chartist, however, then just know that a clear break past 0.7970 means that bulls are likely shooting for 0.8040 next. A downside break past 0.7880, meanwhile, means that them bears are likely gunning for 0.7790 next.
Okay, gonna be real with y’all. That there descending channel ain’t a confirmed setup yet since the pair has to move back down in order to validate the channel.
As such, only the real gangsta traders out there may wanna start lookin’ for a trade based on this setup. The more conservative traders out there, meanwhile, may wanna sit this one out.
Anyhow, the pair appears to be hesitating at the area of interest at 145.80. Moreover, stochastic is about to enter overbought territory, so chances are good that bears may jump in to send the pair lower soon.
And if the pair does start moving lower, then y’all may wanna observe how the pair reacts to the next area of interest at the 145.00 major psychological level. If the pair clears that, then that means that them bears will likely be gunning for 144.00 next.
Anyhow, since the channel has not been validated yet, there’s a higher-than-average chance that the pair may move to the upside instead. So y’all may wanna bail yo shorts (if you have ’em) when the pair blasts past 1146.90 on strong bullish momentum.
In any case, just make sure to practice proper risk management, a’ight?