I’m seeing potential long-term trade setups on USD/CAD and GBP/USD, plus a possible reversal on Brent crude oil.
Which among these setups will you most likely trade?
U.K. Oil: 4-hour
Heads up! I’m seeing a head and shoulders pattern on the 4-hour time frame of Brent crude oil.
Are we able to see a selloff soon?
Last week, WTI crude oil was also giving off some reversal vibes, and it looks like its U.K. counterpart is bound to follow suit. A break below the neckline around $60 per barrel could set off a slide that’s at least the same height as the chart formation.
The 100 SMA is gearing up for a bearish crossover while Stochastic is hovering close to the overbought zone, hinting that sellers are about to take the upper hand.
GBP/USD: Daily
Cable looks ready to resume its long-term climb, as buyers are defending the rising trend line support on the daily time frame.
I wouldn’t be surprised if pound bulls charge from here since the trend line coincides with the 50% Fibonacci retracement level and 1.3700 major psychological support.
At the same time, Stochastic is already heading north, so the pair could follow suit while bullish momentum is present. The 100 SMA is also safely above the 200 SMA to indicate that the path of least resistance is to the upside, possibly taking GBP/USD up to the swing high just past 1.4200.
USD/CAD: 4-hour
Here’s another trend setup for y’all!
USD/CAD is hanging out at the top of its falling channel visible on the 4-hour time frame, and it looks like sellers are already returning.
If that’s the case, the pair could slide back to the swing low at 1.2365 or the channel bottom closer to the 1.2300 mark. However, Stochastic is still pointing up to show that there’s some upside pressure left.
If you’re bullish on this pair, you could wait for a break past the latest highs and channel resistance to go long. Price is testing the 200 SMA dynamic resistance after all, and a move above this area could draw more buyers in.
