Looking for swing setups this week?
The Turkish lira made a pretty sharp move early on and might have some momentum left.
Meanwhile, the Aussie might be eyeing a major reversal on its uptrend while gold could carry on with its slide.
Newsflash! Turkey’s President Erdogan decided to sack the country’s central bank head over the weekend, triggering a sharp drop in the lira once markets opened.This could bring a lot of uncertainty when it comes to their monetary policy, which might mean further downside for the currency. Also note that the newly appointed chief, Sahap Kavcioglu, is a known critic of high interest rates.
Further lira weakness could take USD/TRY to the top of its rising channel on the weekly time frame. The pair has just breached the mid-channel area of interest while moving averages and Stochastic suggest further upside.
Who’s in for a reversal play?
AUD/USD appears to be forming a head and shoulders pattern on its long-term chart, and a break below the neckline around .7650-.7700 could set off a downtrend.
Note that the chart formation is approximately 300 pips in height, so the resulting slide could be of the same size.
Stochastic seems to be suggesting that bulls still have some energy left, as the oscillator has room to climb before reflecting overbought conditions. At the same time, the 100 SMA is safely above the 200 SMA on this time frame to reflect bullish momentum.
XAU/USD: DailyGold is still on the decline, but bulls appear to be defending the daily channel support quite well.
If you’re in for a countertrend play, you could attempt to catch a long position to the nearby resistance levels such as the mid-channel area of interest near $1,800 mark or the channel top at $1,850.
Note that the moving averages just made a bearish crossover while Stochastic is approaching the overbought zone to signal exhaustion among buyers.