I’ve got my one good eye on short-term and long-term retracement plays on the crosses this week. Take a look!
First up is this potential head and shoulders formation on the daily chart of EUR/AUD. The pair previously tumbled below a long-term rising trend line to signal that a downtrend is in the cards, but price needed a pull up to gather more bearish energy.
Price appears to be finding resistance at this area of interest, which is spanned by the Fib levels. If these keep gains in check, the pair could fall back to the swing low to complete the reversal pattern.
Stochastic is already in overbought territory to reflect exhaustion among buyers. Turning south could draw bears back in and allow the selloff to resume.
If you’re a euro bull, you might like this uptrend momentum setup better. Price already bounced off the area of interest, which coincided with the daily rising trend line and 61.8% Fib but has room to climb before reaching the swing high.
Stochastic is indicating overbought conditions, though, so a slight dip may take place, possibly back to the trend line support. If the floor continues to hold, EUR/CAD could rise all the way to the 1.6150 minor psychological mark and beyond.
Last but certainly not least is this simple channel pullback opportunity on the 1-hour chart of GBP/CAD.
Price is currently testing the mid-channel area of interest and a deeper correction could take it to the channel support closer to the 1.7500 handle and 61.8% Fib.
Pound bulls could be ready to charge soon as a bullish divergence can be seen, with price forming higher lows and stochastic making lower lows. Once buyers jump in, the pair could make its way up to the swing high near the top of the channel.
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