Yo! Let’s end this week’s intraday charts update with a couple of chart patterns on the Aussie, with AUD/JPY and AUD/USD in focus.
AUD/JPY’s trip to the downside was interrupted when the pair found support at 84.50. However, bears kept fighting back. And so the pair has been making lower highs. And in the process, a descending triangle has formed for us to play with.
A descending triangle is a bearish forex chart pattern, so we are mainly bearish on the pair. And all the more so, given that them moving averages are still in downtrend mode. It even looks like the 100 SMA is acting as dynamic resistance.
However, stochastic just recently pushed off from oversold territory and is making its way higher. As such, there’s also a chance that the pair may stage an upside triangle breakout.
An upside breakout needs to take out 85.50 and 85.30, though. But if those key price areas are cleared, then that means that bulls are likely gunning for 86.70 next.
As y’all can see, AUD/USD is currently testing that descending channel’s resistance area, which is just below the key price area at 0.7640. And since stochastic is already indicating overbought conditions and all that, there’s a good chance that the pair may be going back down soon.
Do note, however, that them moving averages just recently crossed-over into uptrend mode. There’s therefore a higher-than-average chance of an upside channel breakout. Although the pair needs to clear 0.7690 before the breakout is confirmed.
And since there’s a higher-than-average chance for an upside channel breakout, y’all may wanna wait until the pair moves lower past 0.7610 while smashing that there rising trend line before going short on the pair.
Anyhow, just make sure to practice proper risk management as always, a’ight? Peace! See y’all again next week!