We’re zooming out to the daily charts today, fellas!
In case you missed it, USD/CAD looks ready for a reversal while EUR/AUD is about to hit a major support level.
Get these setups while they’re hot!
First up is a nice and simple trend on the daily. As you can see, EUR/AUD is chillin’ at the 1.6000 major psychological level that’s also right smack at a trend line support that’s been solid since late February.
I’m not seeing hesitation candlesticks yet, so it’s also possible that the euro bears or Aussie bulls are fired up enough to break below the trend line.
If you see EUR/AUD trade and stay below the support, then you can look into targeting the 100 or 200 SMAs on near 1.5850.
But what if traders take their cues from the trend line support or the almost “oversold” Stochastic signal? Euro bulls and trend followers can scale in at current levels and add positions if EUR/AUD shows the first signs of another trend line bounce.
After breaking above a trend line resistance in July, USD/CAD looks ready to follow through with an uptrend.
Or is it? The faster 100 SMA is catching up to the slower 200 SMA and could soon cross above the dynamic inflection point. If the last two SMA crossovers are any clues, then a crossover might lead to more gains for USD/CAD.
The 1.2800 and 1.2975 previous areas of interest would be my first bets if USD/CAD gains more support in the next few days.
Of course, it’s also possible that USD/CAD is about to range and that we’re seeing the expensive side of the consolidation.
Dollar bears who are confident that USD/CAD will dip down to 1.2400 or even its May lows can still short at current levels and place stops above August’s highs for a decent risk ratio.