Looks like last week’s pound watch list was spot on! Could this new set score big pips as well? Check ’em while they’re fresh.
Remember when I chickened out of a double bottom play on GBP/CAD? Well, the pair is forming yet another classic reversal pattern and seems to be on its way to test the neckline, so I’m keeping my one good eye locked on it.
In particular, I’m watching the 1.7200 major psychological level and area of interest closely to wait for bullish confirmation. A break above this neckline could spur a rally of at least 600 pips or the same height as the formation. However, stochastic is already indicating overbought conditions for now, so a drop might ensue if sellers return.
This one broke out of its short-term reversal pattern last week but could be approaching a ceiling visible on its daily chart. Recall that GBP/CHF also fell through a long-term ascending channel, so the recent rally could trigger a retest of the broken support.
This is around the area of interest at the 1.3150-1.3200 levels, which is in line with the 50% Fibonacci retracement level. Price is currently testing the 38.2% Fib at the 1.3000 major psychological mark which already might be enough to hold as a ceiling and send the pair back to the swing low.
Steering clear of pound pairs these days? Here’s something else swing traders might like.
CAD/JPY appears to be in the middle of a pullback to the broken ascending triangle top on its daily chart before resuming its climb. Stochastic is heading south after reaching overbought levels after all, which suggests that buyers are taking a break and letting sellers take control.
Applying the handy-dandy Fib tool on the latest rally shows that the broken resistance is right smack in line with the 50% retracement level at the 86.50 minor psychological mark. A deeper correction could last until the 61.8% Fib, just slightly below the 86.00 handle.
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