I’m seeing major inflection points about to be tested on GBP/CAD and AUD/USD!
Will buyers step up to defend support or will we see breakouts?
GBP/CAD: Daily
Wondering why GBP/CAD is pausing from its sharp selloff? Well, the pair is hitting a roadblock at the bottom of its long-term range!
If pound bulls return right here, the pair could bounce back up to the nearby resistance levels, possibly until the middle of its range at the 1.7000 major psychological mark. After all, Stochastic is indicating oversold conditions or exhaustion among sellers, so buyers might take over soon.
However, the 100 SMA is below the 200 SMA to hint that bears still have some energy left in ’em. A break below the range bottom around the 1.6800 level could set off a drop that’s the same height as the rectangle pattern or roughly a thousand pips!
Note that the pair has formed lower highs to show that breakdown vibes have been getting stronger, and price is below both moving averages as additional confirmation of bearish pressure.
AUD/USD: 4-hour
Here’s a classic trend setup for all those who want to go with the flow!
AUD/USD has been trending higher recently, cruising above an ascending trend line that’s been holding since last month. Price looks ready for another dip to this support area, which happens to line up with a former resistance and the Fib levels.
In particular, the 61.8% level seems closest to the trend line near the .7230 level and 100 SMA dynamic inflection point. This moving average is above the slower-moving 200 SMA to indicate that the uptrend is more likely to resume than to reverse.
Also, Stochastic is inching close to the oversold region to signal that sellers could use a break. If that’s the case and the oscillator starts pulling higher, buyers could regain the upper hand and take AUD/USD back up to the swing high and beyond.
