I’ve got a few more correction setups on my radar this week, and I think we’ve got enough market catalysts to spur big moves. Take a look!
First up is this break-and-retest scenario on GBP/AUD that already seems to be playing out. Price is starting to bounce off the resistance-turned-support area while stochastic is heading north.
This suggests that buyers are ready to take control from here, likely taking the pair up to the next upside targets marked by the Fibonacci extension tool. In particular, the 50% extension lines up with the swing high around 1.8550 and stronger bullish momentum could lead to a rally up to the full extension at 1.9738.
Here’s another potential pullback play for the swing traders out there! EUR/AUD recently tumbled below a long-term rising trend line, indicating that a reversal is in the cards.
However, the pair might need a quick correction to gather more bearish energy in sustaining the downtrend. Stochastic is on the move up anyway, so sellers might be taking a break for now.
Using the handy-dandy Fib tool on the latest swing high and low shows that the 50% to 61.8% levels span an area of interest around 1.5700 to 1.5800. If these levels keep gains in check, EUR/AUD could make its way back down to the swing low or lower.
Don’t look now but GBP/CHF is testing the very bottom of the long-term ascending channel right at this very moment! A bounce could be due while stochastic is pulling out of the oversold region to signal a return in bullish pressure.
In that case, the pair could bounce up to the top of the channel around 1.4000-1.4200 or at least until the middle of the channel which has also held as an area of interest.
A break below support, on the other hand, could mean a steeper selloff. Better keep close tabs on the top-tier catalysts from the U.K. this week then!
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.