The setups for the previous week played out quite well. CADJPY was the biggest winner with the massive drop within the week. EURCHF went below ascending channel support but the momentum wasn’t strong for the bears. GBPNZD was the one which didn’t meet expectations since it hung above falling wedge resistance without bullish strength only to drop later.
For the coming week, the charts in focus are; GBPCHF, GBPAUD & AUDCHF.
For close to four weeks this pair has made no prominent directional move. The price of GBPCHF has been trading through a converging range which has printed out a symmetrical triangle chart pattern. Looking at the market structure, there’s a high probability that this pair is about to establish a firm direction.
GBPCHF comes up with a simple trade idea of a breakout. A break of the triangle resistance or support would determine where this pair heads to. The downside to this trade idea is a false breakout either way.
It seems the British Pound pairs have been trading quietly over the past few weeks and GBPAUD is no exception. For about three weeks, this pair has been heading down weakly in a diagonal market structure. The market has presented us a simple descending channel to make sense out of the chaos.
The bears remain in control of this pair if it keeps trading within the confines of the descending channel. I would be rooting for the breakout; especially to the upside of the channel.
Unlikely, the GBPAUD could also break the support of the channel if the bears gather unusual momentum.
The AUDCHF has found resistance at the 0.6845 area. The candlesticks for Friday and Thursday are also signaling bearish strength. In the medium-term view, the pair has been locked in a consolidation for two months. The week closed with price resting on the support of the consolidation.
A breakout is imminent, but we can’t be certain until the market goes below the support level of the consolidation. The bulls would still be in charge if AUDCHF keeps trading within the consolidation. On expecting a break of the support as well, the least desired outcome could be a false break.