Whaddup homies! Starting the new year with solid mix of textbook setups, including a range play, broken triangle and a Fib retracement. Check it!
Let’s start off with this textbook break-and-retest play on the daily chart of AUD/CAD. We can see a clear descending triangle break right at the beginning of 2019, one that was just as fast on the way down as it was back up. The pair is now trading just below the major support level around 0.9565, and with Stochastic already falling from overbought conditions sellers could hop back in to take control here.
With the recent swing low around 0.9300, the risk to reward on a downside play is favorable, given a stop is placed just above that broken support area.
Next up is this simple uptrend setup on EUR/AUD. After pretty much a one way move higher through out December, the pair finally found sellers around the 1.6400, which happens to be the major resistance area last seen in September and October.
Short-term, the pair is still in an uptrend and after a 61% Fibonacci retracement of the December swing move, as well as the Stochastic showing possibly oversold conditions, this is a solid technical setup with both good probabilities of success and high potential return-on-risk with a stop just below the Fibonacci retracment area.
Keep in mind too that if the Fibs fail to hold, a downside break could see a move all the way down to the 1.5400 – 1.5600 area, a very strong support area last seen through the Summer of 2018 and in November.
Lastly, here’s a super simple one as it doesn’t get anymore basic than this range play on EUR/GBP. And although, there are many opportunities for short-term traders to play this market.
For the last three weeks, EUR/GBP traders have kept this market in a tight range between the 0.8950 – 0.9050 handles. And given that the pair has been grinding higher, it makes sense that traders go with the trend up once again as the bottom of the range holds for a possible buying opportunity in the new year.
Even with the market already bouncing from the bottom of the range, the potential R:R for a long position to the top of the range still looks pretty good for a short-term play if that’s how you’re biased, and if you’re short biased, a downside break of the 0.8950 support has a similar looking potential R:R as support may come around the 0.8850 handle before technical buyers step in.
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.