If you’re a breakout chartist, then you may wanna check out today’s intraday charts update ‘coz I found a couple of triangles on EUR/AUD and EUR/NZD. Whoa! That’s a euro + triangle + comdolls triple combo right there!
However, the pair’s price action has been tapering into a point recently. And if we connect the most recent peaks and troughs, we can see that a fresh symmetrical triangle has apparently formed.
As y’all should know by know, a symmetrical triangle pattern means that bulls and bears are fighting it out. However, neither side has a clear advantage, which means that the pair is just as likely to break to the upside as it is to the downside.
As such, we don’t really have a strong directional bias on the pair. And it would even be prudent for y’all to prepare for both an upside and downside scenarios.
Just note that the pair needs to clear the area of interest at 1.5890 before the upside breakout is validated. If the pair fails to do that, then the risk remains high that the breakout may end up being a fakeout.
A downside breakout, meanwhile, should smash 1.5660, ideally on strong bearish momentum, before the break is confirmed. Although a move lower past 1.5710 would be an early signal that bears are taking over.
A triangle has also apparently formed on EUR/NZD’s 1-hour chart. This one’s a bit different, though, since this one’s a descending triangle.
As the name implies, a descending triangle is a bearish chart pattern. We’re therefore mainly bearish on the pair. And the basic play is to look for an opportunity to go short if the pair breaks lower past 1.7130, with the area of interest at 1.6980 being the most likely destination.
And looking at technical indicators, they appear to support further downside moves since them moving averages are in downtrend mode. Stochastic, meanwhile, is already signaling overbought conditions and all that.
However, there is always a risk that the pair may break to the upside instead. And all the more so, given that the trend before the triangle formed was an uptrend. It would therefore be a wise move to prepare for a potential bullish scenario as well.
If a bullish scenario does play out, then a move higher past the 1.7300 major psychological level would be an early sign that bulls are in control. However, y’all may wanna wait until the pair also clears 1.7370 before chillaxing.
In any case, y’all just remember to practice proper risk management as always, a’ight?