Hoping to catch market tops or bottoms?
Or looking to ride a long-term change in trend?
You gotta check out these fresh reversal patterns and breakouts on gold, CAD/JPY and EUR/USD.
Gold (XAU/USD): Weekly
Take a look at that long green marubozu on the weekly chart of gold!
This very bullish Japanese candlestick just busted through the top of the precious metal’s descending channel, indicating that a reversal from the downtrend is in the works.
Technical indicators are also aligned with the upside move, as Stochastic pulled right back up from its dive to signal that buyers refuse to let up.
At the same time, the 100 SMA is still above the 200 SMA to show that the path of least resistance is to the upside or that more gains are in the cards.
Just be mindful that the gap between the moving averages has narrowed recently, reflecting slightly slower bullish momentum and a possible bearish crossover. Still, it’s worth noting that the 100 SMA held as dynamic support on the latest dip.
EUR/USD: 4-hour
Is that a sketchy head and shoulders formation I’m seeing on the 4-hour chart of EUR/USD?
The pair has been hovering above the neckline support at the 1.0500-1.0550 region for quite some time, as euro bears have yet to make a definitive break lower.
If that happens, EUR/USD might be in for a drop that’s the same height as the chart pattern. That’d be roughly 500 pips, so don’t miss it when it happens!
Moving averages are pointing to more losses, as the 100 SMA is safely below the 200 SMA while the latter appears to be holding as dynamic resistance.
Stochastic has some room to head higher before reflecting overbought conditions, though, but turning lower would add confirmation that sellers are back in action.
CAD/JPY: Daily
Here’s another long-term reversal pattern on the daily time frame of CAD/JPY.
Price is also down to the neckline of the formation around the 96.00 major psychological mark, and a break lower could trigger a slide that’s approximately 1,400 pips in height.
The 100 SMA and 200 SMA recently completed a bearish moving average crossover, which means that sellers are in control of the game right now.
However, Stochastic is hanging out at the oversold region and might be ready to head back up, hinting that buyers could still defend the support area.
If this happens, CAD/JPY could still pop higher to nearby resistance levels, possibly until the dynamic inflection points at the moving averages.
Just keep an eye out for bearish candlesticks confirming that a break lower is taking place!
