The Aussie, Loonie and Sterling are set to make moves this week with top tier events for each on the way. Here are the best setups to watch if you’re looking to catch that volatility.
For you Loonie bears out there, CAD/CHF should be on your radars as the technical picture indicates that a reversal back to the downside may be in the works. On the four hour chart above, we can see a double toppish and divergence signal form around the 0.7600 handle, and the pair has already moved back to the downside since then.
The market has already found minor support around the 0.7550 area, which could be viewed as the neckline and the jump off point for the next move in CAD/CHF. Which way will that be? We’ll have to wait-and-see, but with Canadian CPI and retail sales data this week, it won’t be too long before we see traders making moves.
The Aussie dollar is set to make big moves as well this week with the monthly employment report from Australia coming soon. That event could give this downtrending market in AUD/CAD fresh life as the pair seems to have slowed down and consolidate around the 0.9100 – 0.9200 area. For those looking the play your friend trend in this market, it’s probably a good idea to wait for full retest and hold by the bears of the 0.9200 area before considering a short play. This could be around the corner given the upcoming events and the stochastic signaling the recent bounce higher may already be running out of steam.
Last but not least, we’re taking another look at Guppy once again, this time on the four hour chart. This setup is super simple as we’ve got the lower ‘highs’ pattern running against a strong support area around 135.00 – 136.00. With the stochastic signaling that bulls are holding once again at 135.00, a bounce may be ahead to give the bears another short opportunity at a better price. But keep in mind that the U.K. is releasing top tier economic updates in the form of employment and inflation data, so be open to the possibility that a break of the falling ‘highs’ pattern could be a signal to go long the pair if the data turns out to be super positive.