Sup, dawg? In today’s intraday charts update, we’ll be checking up on old setups on GBP/AUD and AUD/CAD. Of course, it goes without saying that we’ll be looking for new setups as well.
GBP/AUD is a gift that keeps on giving! If y’all can still recall, we first played that ascending channel on GBP/AUD’s 1-hour chart way back on November 13.
And in yesterday’s intraday charts update, we wanted to add to our longs because the pair was pulling back and we were expecting the pair to find support at 1.7370 since that lined up with the 50% Fibonacci retracement level.
Well, check that out, fam! That’s right! Price action played out exactly as expected since the pound pulled back to 1.7370 before violently surging higher for almost 400 pips. Almost 400 pips in 24 hours! And if your longs from our November 13 setup are still alive, then you’re probably swimming in pips now. How do you like that, fam? I sure do! Aww, yeah!
Anyhow, the pair is fast approaching 1.7790. And y’all can’t see it on that there 1-hour chart, but 1.7790 is actually a strong area of interest. Just zoom out to the higher time frames, such as a daily or weekly chart, and y’all will see what I mean.
Since the pair is about to test an area of interest, and since the area of interest is just below the channel’s resistance area, there’s a chance that the pair may be moving back down again. Also, stochastic is already signaling overbought conditions and all that.
If resistance does form at 1.7790 (or below it), then them bears will likely be gunning for 1.7590 and 1.7460. And if you’re gangsta enough, you can even start lookin’ for opportunities to go short. Shorting near the resistance area of an ascending channel is a counter-trend play and extra-risky, though, so if that ain’t your thing, then you may want to wait until the pair pulls back and finds support either at 1.7590 or 1.7460.
As usual, there’s always a risk that a descending channel may get invalidated, so just get ready to bail yo longs if the pair moves lower past 1.7370.
As y’all can see, the pair cleared the key area of interest at 0.9730 just fine. However, the pair failed to take out the other key price at 0.9760.
As such, we’re bullish on the pair, but we’re also wary of the possibility that the pair may move lower instead. And to that end, we took account of the most recent price action. And it looks like a fresh ascending channel has formed on the pair.
The pair is currently pulling back towards the channel’s support area, which should be somewhere just below the area of interest at 0.9700. And looking at our technical indicators, we can see that the moving averages are in uptrend mode. It even looks like the 100 SMA may act as dynamic support. Moreover, stochastic is indicating oversold conditions and all that already.
We’re therefore expecting the pair to continue trending higher. But again, the pair failed to take out 0.9760, so there’s a real risk that the channel may fail. So just be ready to start lookin’ for opportunities to go short if the pair invalidates the channel and moves lower past 0.9670 since that invalidates both the channel and the upside triangle breakout and is a clear sign that bears are in control.
In any case, just make sure to practice proper risk management as always, a’ight?