Wassup, fam! I hope y’all are in the mood for another batch of chart patterns ‘coz I’m serving up a couple more, with AUD/NZD and USD/CHF in focus.
As y’all can see, AUD/NZD has been trending lower while bouncing up and down inside that there descending channel since October.
And as y’all should know by now, one of the more conservative ways to play a descending triangle is to look for opportunities to go short when the pair is at or close to the channel’s resistance area.
Unfortunately, that ain’t the case in today’s setup since the pair has already moved lower. Still, y’all may wanna put this pair on yo watchlist since the pair appears to be finding support at the mid-channel area.
Also, stochastic is already signaling oversold conditions and all that. There’s therefore a chance that the pair may pull back up to retest the channel’s resistance at 1.0540.
Of course, there’s also always the risk for an upside channel breakout. Such a scenario seems unlikely at the moment. But if such a scenario plays out, then clearing 1.0590 and 1.0620 would validate the topside breakout. The pair would still need to clear 1.0690 in order to signal a potential trend change, though.
A symmetrical triangle appears to have formed on USD/CHF’s 1-hour chart. Well, “symmetrical-ish” would probably be more accurate since the triangle ain’t really all that symmetrical.
Anyhow, a symmetrical-ish triangle means that bulls and bears are playing a game of tug-o-war. However, neither side is really winning out.
As such, the pair is just as likely to break to the upside as to the downside. It would therefore be prudent for y’all to prepare for both scenarios.
Just remember, however, that a topside breakout needs to clear the 1.0000 major psychological level. Otherwise, the risk remains high that the breakout may fail and end up being a fakeout.
A downside breakout, meanwhile, needs to smash lower past 0.9870, ideally on strong bearish momentum.
In any case, y’all just make sure to practice proper risk management as always, a’ight?