Today’s intraday charts updates is for the breakout chartists out there ‘coz I’m serving up a couple of triangle patterns, with EUR/AUD and USD/JPY in focus.
USD/JPY has been trading somewhat sideways lately while apparently tapering into a point, giving us that there symmetrical triangle to play with.
Well, the triangle is not perfectly symmetrical, so “symmetrical-ish” would probably be a more accurate description of the chart pattern.
Anyhow, a symmetrical-ish triangle means that bulls and bears are playing a game of tug-o-war but neither side is really winning out. As such, the pair could potentially break in either direction, which means y’all shouldn’t really have a strong directional bias on the pair.
With that said, the resulting breakout move will likely have enough momentum for a whopping 300-pip run, based on the height of the chart pattern.
Do note, however, that an upside breakout needs to take out both areas of interest at 111.00 and 111.40 before y’all can chillax. You see, unless the pair clears those levels, the risk remains high that the breakout may end up being a fakeout.
A downside breakout, meanwhile, needs to smash lower past 108.30, ideally on strong bearish momentum.
As y’all can see, EUR/AUD’s recent climb faltered when the pair encountered resistance at 1.5740.
Them bulls ain’t ready to give up just yet, though, since they have entrenched themselves at 1.5640 and have been fighting off the bears’ attempts to push the pair lower.
And in the process, a descending triangle pattern appears to have formed.
As the name implies, a descending triangle is mainly a bearish pattern, so we’re also mainly bearish on the pair and we’re lookin’ to go short if the pair breaks lower past 1.5640.
Do note, however, that the Fibonacci retracement setup from Monday’s intraday charts update is still in play. So if the pair does move lower, then just keep a really close eye on the pair and observe how it reacts to 1.5510.
Also, do note that there’s always a risk that the pair may break to the topside instead. And a move past 1.5740 is the earliest sign that bulls are taking control. Although the upside breakout ain’t confirmed until and unless the pair also takes out 1.5800.
In any case, just remember to always practice proper risk management, a’ight? Peace y’all!