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The commodity currencies were off to a weak start this week, but could they have a chance at rebounding from these inflection points in the next few days?

Significant Forex Levels to Watch
AUD/USD USD/CAD NZD/USD
Week Open (WO) 0.7952 1.2337 0.7302
Previous Week High (PWH) 0.8104 1.2392 0.7435
Previous Week Low (PWL) 0.7908 1.2172 0.7247
Top Weekly ATR (tWATR) 0.8019 1.2435 0.7370
Bottom Weekly ATR (bWATR) 0.7886 1.2239 0.7235
Other significant levels 0.8025, 0.7900 1.2433, 1.2059 0.7275, 0.7200

In case you’re wondering what ATRs are all about and how I computed those figures, make sure you check out my entry explaining my trading strategies.

Here are some of the comdoll forex setups I’m looking at this week:

AUD/USD: 1-hour

AUD/USD 1-hour Forex Chart
AUD/USD 1-hour Forex Chart

After breaking below several key support zones last week, AUD/USD is now starting to establish a downtrend with this fresh descending channel pattern forming on the 1-hour chart.

Price is just bouncing off support around the .7900 handle and might pull up to the channel resistance from here. Applying the Fibonacci retracement tool on the latest swing high and low shows that the 50% level lines up with the .8000 major psychological mark and the mid-channel area of interest.

However, stochastic is already on the move down to signal that the 38.2% Fib might be enough to keep gains in check and that Aussie bears are regaining the upper hand.

USD/CAD: 4-hour

USD/CAD 4-hour Forex Chart
USD/CAD 4-hour Forex Chart

Yep, I’m watching this correction play on USD/CAD pretty closely since I missed the chance to hop in the longer-term selloff one too many times in the past few months!

It looks like the pullback ain’t over just yet and that the pair could retrace all the way up to the 61.8% Fib near the falling trend line. Stochastic doesn’t look eager to head south for now, which suggests that buyers still have enough energy left in ’em.

But if any of the Fibs hold as resistance, USD/CAD could head back to the swing low near the 1.2050 minor psychological mark or create new lows. On the other hand, an upside break past the trend line and 1.2500 mark could signal a reversal from the selloff.

NZD/USD: 1-hour

NZD/USD 1-hour Forex Chart
NZD/USD 1-hour Forex Chart

Kiwi bulls also look exhausted from the recent rallies as a head and shoulders formation can be seen on the pair’s 1-hour chart.

Now this is considered a classic reversal signal, but price has yet to break below the neckline around the .7275 area before confirming the drop. Stochastic is still pointing down to show that sellers could be strong enough to push price down by around 150 pips or the same height as the chart pattern.

In case you’re wondering why the New Zealand dollar is looking ready to drop, lemme tell you that the country’s elections just resulted in a victory for the National Party but not enough for them to hold majority. And as Forex Gump wrote in his 411 on NZ Elections, this scenario could mean a bit more uncertainty for the economy as it waits to find out if a coalition will be formed.

Cheers,

Happy

See also: Q2 2017 Trading Performance Review

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.