Sup, fam! I’m starting this week’s intraday charts update with a stroll down memory lane as we revisit old setups on CAD/CHF and GBP/AUD. Of course, it goes without saying that we’ll be looking for fresh setups as well.
A descending triangle is a bearish chart pattern, so we were mainly lookin’ to go short back then. And as y’all can see the pair did break to the downside. So if you were able to catch that, then congratulations on bagging some pips. Aww, yeah!
Anyhow, if we take the most recent price action into account, we can see that the pair appears to be moving ever lower while trapped inside a descending channel pattern.
The channel’s resistance at 0.7440 seems to be holding at the moment. Also, the pair appears to be gearing up for a potential swing to the downside. Y’all may therefore wanna start lookin’ for opportunities to go short on the pair.
However, do note that stochastic is already signaling oversold conditions and all that. And that means that there’s also a risk that the pair may stage a topside channel breakout.
If such a scenario plays out, then a move higher past 0.7480 would be an early sign that bulls are winning out. The pair would still need to clear 0.7540 in order to signal a potential trend change, though.
We found an ascending channel in GBP/AUD’s 1-hour chart way back on June 19. And unfortunately, that channel setup failed to pan out because support at 1.7850 failed to hold, resulting in a downside channel breakout.
Bulls weren’t ready to give up, though, so the pair didn’t quite validate the downside channel breakout by smashing lower past 1.7730.
Also, bulls kept trying to push the pair ever higher, resulting in ever higher troughs. Bears, meanwhile, have successfully defended resistance at 1.7970. And in the process, we can see that an ascending triangle has recently formed.
As the name implies, an ascending triangle is a bullish chart pattern. We’re therefore mainly bullish on the pair. And the name of the game is to look for opportunities to go long if (or when) the pair clears 1.7970, ideally on strong bullish momentum.
Looking at our technical indicators, however, we can see stochastic has already reached overbought territory. Them moving averages, meanwhile, appear to be coming closer together for a potential cross-over into downtrend mode.
Given all that, there’s also a chance that the pair may break to the downside instead. The pair would still need to smash lower past 1.7730, though.
Whichever scenario plays out, y’all just remember to practice proper risk management as always, a’ight?