Who’s up for trading swing trades with commodity-related currencies?
If you are, then you definitely want to check out CAD/JPY’s potential reversal and GBP/AUD’s range.
Which setup will you more likely trade?
GBP/AUD: 4-hour
Not counting the brief dip to 1.7200 earlier this month, GBP/AUD has been locked inside a 300-pip range since the start of April.
The ball is on the bears’ court today as GBP/AUD retests the 1.7800 range resistance.
Stochastic‘s almost overbought signal can probably tempt more sellers but before you sell the pound like there’s no tomorrow, take note that the latest candlestick is showing buying pressure.
If you see sustained trading above the 1.7800 psychological area, then GBP/AUD could head towards the 1.8000 or 1.8150 previous areas of interest.
However, if 1.7800 holds as resistance again, then you can probably aim for a drop back down to the 1.7650 mid-range or 1.7500 range support zones.
CAD/JPY: 4-hour
I spy with my eye a potential reversal on the 4-hour time frame!
CAD/JPY has been making lower highs and lower lows since April, which is interesting enough even before we note that the highs and lows are forming a descending channel on the chart.
The 100 SMA has also narrowed the gap against the 200 SMA, suggesting that CAD/JPY’s new highs aren’t as far from their longer-term averages as much as they were when the uptrend started in mid-March.
Look out for bearish momentum below the 101.00 psychological area.
If CAD/JPY pops up bearish candlesticks below 101.00 and the 100 and 200 SMAs, then the pair could extend its 4-hour downtrend and head for May’s lows.
Don’t forget to discount an upside breakout though! If CAD/JPY breaks above the channel, then the pair could still head towards the 102.00 or 102.50 previous highs.
