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?
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.
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.
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.