I’ve got a potential range breakdown and a trend reversal setup on today’s canvas.
Check out these plays on the 4-hour charts of AUD/NZD and EUR/CAD:
AUD/NZD: 4-hour
We’ve got a break-and-retest situation right here, fellas!
AUD/NZD just broke through its rising trend line support on the 4-hour time frame, indicating that a reversal from the uptrend is due.
Price is in the middle of a pullback to the broken resistance, which might hold as a ceiling from now on.
If it does, the pair could make its way down to the bearish targets marked by the Fibonacci extension tool. Stochastic is heading south from the overbought zone, so price could follow suit while selling pressure is in play.
Just be careful since the 100 SMA is above the 200 SMA, which means that there’s still a chance for buyers to steal the show.
EUR/CAD: 4-hour
Looking to trade ranges? Here’s a neat one on EUR/CAD!
The pair found resistance at the 1.4600 major psychological mark and is currently testing support at the 1.4165 level. A break below this could set off a drop that’s the same height as the range, so better keep your eyes peeled for big red candles right here.
Technical indicators are painting a different picture, though. The 100 SMA is above the 200 SMA to suggest that support is more likely to hold than to break, possibly allowing the pair to bounce back to the top or at least until the middle of the range.
At the same time, Stochastic is just starting to pull up from the oversold region to show that buyers are warming up.