I’ve got my one good eye on a reversal setup, a classic pullback play, and a falling wedge formation this week. Which one’s my best bet?
Reversal alert! GBP/AUD might be done with its climb as it forms a head and shoulders pattern on its 4-hour time frame. With price gapping down over the weekend, it’s closer to testing and possibly breaking its neckline support!
If that happens, the pair could slide by around the same height as the chart formation, which spans 1.7800 to around 1.8700. Stochastic is heading lower but nearing oversold territory, which suggests that sellers might need to take a break soon.
Now here’s a simple break-and-retest setup on NZD/JPY. After breaking through that range resistance we were eyeing last week, price could be due for a pullback as it hesitates to climb past the 77.00 major psychological mark.
Stochastic is heading south so the pair might follow suit while buyers take it easy. Applying the handy-dandy Fib tool on the latest swing low and high shows that the 50% level is close to the broken range top at the 75.00 handle and might be enough to keep losses in check.
Lastly here’s a EUR/CAD falling wedge pattern you gotta keep tabs on. Price is just testing the resistance and looks prime for a test of support around 1.4700. However, stochastic seems to be suggesting that bulls are eager to charge.
If so, another test of the wedge top around the 1.5050 mark could be underway. A break above this resistance could take the pair up by around 800 pips or the same height as the wedge formation.
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