These forex pairs are gearing up for a test of their major support zones soon!
Will buyers defend the floor or will they cave?
GBP/AUD: 4-hour
Can GBP/AUD resume its slide or will it go for a reversal? I’m getting mixed signals on this one, fellas!
On one hand, the pair is cruising inside a rising channel that’s been holding since mid-November last year. If the uptrend stays intact, GBP/AUD could bounce back up to the top around 1.9350 or at least until the mid-channel area of interest.
On the other hand, I’m seeing a head and shoulders reversal pattern with the neckline right around the channel support at 1.8900. A break below this could set off a drop that’s the same height as the chart formation, which spans roughly 400 pips.
Technical indicators seem to be pointing to stronger odds of a break lower, as Stochastic looks ready to turn south while the SMAs are gearing up for a bearish crossover.
USD/CHF: 4-hour
This one’s in selloff mode also, and it might find some buyers at the long-term floor around the .9100 mark.
If you wanna catch some of the bearish momentum, there’s still time to hop in and ride the move to the range support from here. Just be careful since the 100 SMA is above the 200 SMA, hinting that buyers could take over any time.
Planning on trading the range? Better wait for reversal candlesticks right around the bottom and for Stochastic to turn higher from the oversold region, suggesting a likely return in bullish pressure.
If support holds, USD/CHF could recover to the top of the range around the .9340 level or at least until the middle near .9250.
A breakdown, on the other hand, could set off a slide that’s the same size as the range. That’s around 240 pips, so better be ready to jump in if that happens later on!
