Welcome back traders, from the hiatus from the festive season. Charts in focus is back with a bang! As usual the forex market, which is never short of signals gives us some very nice opportunities for the week ahead. This week, I’m looking at five currency pairs and one commodity. The charts in focus for the week are; AUDNZD, USDJPY, USDCAD, AUDUSD, NZDUSD and Gold (XAUUSD).
I made a post about this very pair within the first hour of Friday. I had pinpointed a descending triangle on it and before the close of the trading week, we had a clear break of triangle resistance. Just because it was the last trading day of the week, I didn’t take a position but I’d be looking forward to taking one, if there’s a retest which turns triangle resistance to support. However, longs need to be cautioned as there’s a strong resistance right ahead.
This pair is already in a very strong downtrend and there seem to be no signs of slowing any time soon. Ever since breaking support on the 20th December 2018, it has run close to 800 pips before taking a breather. From the daily timeframe, Friday’s candlestick is a bullish one but when you switch to the 1-hour timeframe, that bull candle is no other than a rising wedge. In text-book price action, this formation is a continuation pattern. I will be looking forward to short this market on the break of wedge support. A break of wedge resistance will invalidate this trade idea.
The USDCAD has taken a heavy and swift downward movement with just 3 days as opposed to a slow and choppy rise. It is now clear that the upside break of the ascending channel was a false one. It now has one test, which is to break ascending channel support and that is very likely. I’ll be looking for signals to short this market within the week.
AUDUSD bulls seem to be very aggressive on this move. The flash crash on the 3rd of January prompted a very long tailed hammer and coupled with that is a very strong bull candle. It doesn’t end there; it has also broken descending channel resistance on a daily closing basis. If this turns out to be a true one, then that is too much confirmation for a single pair.
This pair is the direct counterpart of the AUDUSD and the scenarios described right above minus the channel, seems to fit perfectly with the NZDUSD. It is of no wonder; it is just currency correlation at its very best. I am bullish on this pair as well.
Gold has been acting as a safe haven for investors since the latter part of December 2018 till now. This has made it firmly strong even when the EURUSD was choppy. As long as price remains above the flag’s resistance, I will be looking forward to buy. Any retest of the flag’s resistance as support would also be a stronger reason to buy.
My picks for the week are USDJPY and AUDUSD. Have a profitable week!