I hope y’all are ready for another stroll down memory lane since we’ll be checking up our old setups on AUD/JPY and EUR/CAD. And as usual, we’ll be lookin’ for fresh plays as well.
That there ascending channel on AUD/JPY is just the gift that keeps on giving!
If y’all can still recall, we first played that channel way back on July 14. And the last time we played it was on July 19 when the pair was hesitating at that there channel’s resistance area at 89.20.
As such, we were waiting back then for the pair to test the channel’s support at 88.00 so that we jump in with a long.
And as y’all can see, that setup played beautifully since 88.00 did hold as support and the pair climbed back up to 89.20, so congratulations if you were able to ride the pair. Aww, yea! We got bank, dawg!
For today’s play, we’re lookin’ to go long on the pair again since the pair is about to test the channel’s support area again.
Be extra careful this time around, however, since resistance at 89.20 appears to be strong. Moreover, the pair has been having difficulty moving past the mid-channel area, which implies that bullish momentum may be running out of steam.
As such, there’s currently a higher-than-average chance for a downside channel breakout. And if there is a downside breakout, then them bears will likely be gunning for 88.00 initially. Once they clear that, them bears will try to smash past 86.90 in order to validate the breakout and signal a trend change, so y’all may wanna bail yo longs or even switch to a bearish bias then.
I dunno if y’all can still recall, but we found that there descending channel on EUR/CAD’s 1-hour chart back on July 13.
And since then, the pair traded sideways, which is a real bummer. However, the pair clearly respected resistance at 1.4660 and support at 1.4490, thereby giving us a trading range or rectangle pattern to play with.
Anyhow, if you wanna play within the range, then heads up ‘coz the pair is approaching the rectangle’s resistance area. And chances are good that resistance at 1.4660 will hold since 1.4660 will also serve as the channel’s resistance area.
However, there’s always chance that the pair may break to the topside instead. That seems unlikely at the moment, though. Also, the pair needs to clear 1.4740 and then 1.4850 in order to validate an upside breakout.