I’ve got a triangle on EUR/NZD’s 1-hour chart and a channel on EUR/AUD in today intraday charts update. Hmm. That means I’m serving up a euro + comdolls + chart pattern triple special. How dope is that?
EUR/NZD has been trading sideways recently while apparently tapering into a point. And in the process, a fresh symmetrical triangle pattern has emerged for us to play with.
As always, keep in mind that a symmetrical triangle means that neither bulls nor bears have a clear advantage, which means that the pair could break either to the upside or the downside.
As such, y’all shouldn’t have a directional bias on the pair. And it would even be a prudent move to prepare for both scenarios.
However, just note that an upside breakout needs to clear 1.7060 on strong bullish momentum before the upside break is validated. If the pair fails to do that, then the risk remains high that the breakout may fail and end up being a fakeout. A downside breakout, meanwhile, needs to smash lower past 1.6750.
EUR/AUD has been trading ever lower for some time now while respecting that there descending channel. And presently, the pair appears to be gearing up for a downside move after testing the channel’s resistance area.
Normally, I’d tell y’all to start lookin’ for opportunities to go short. But as y’all can see on that there chart, a smaller ascending channel (highlighted in blue) has formed inside the bigger descending channel.
And since stochastic is signaling oversold conditions and all that already, there’s a chance that the pair would respect the smaller ascending channel over the bigger ascending channel.
And if that happens then the pair will likely stage an upside breakout from the bigger descending channel. Although the breakout will only be validated once the pair takes out the area of interest at 1.5460.
Until then, however, the bigger descending channel is still in play. Although y’all may wanna wait until the pair moves lower past 1.5280 before going short, since that would invalidate the smaller ascending channel.
In any case, just remember to always practice proper risk management, a’ight?