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Price Action Setups: USDJPY, GBPAUD and EURCAD

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The USDJPY train continued to head north today as it blew through resistance at 104.85. The pair is now approaching the year open around 105.30.

If there’s going to be a pullback, this is where it’s likely to happen. Not only is the 105.30 area the year open, it also represents a 6 year cap. The last time this market saw prices north of this level was September of 2008. The next few days should prove very interesting to see how the market reacts to these levels.

Summary: Look for a pullback to 104.85 or potentially a deeper pullback to the 104 area. We’ll need to see bullish price action in either case to confirm that the level is likely to hold. At the very least expect some consolidation up here before the next push higher.

usdjpy daily forex chart

GBPAUD is an interesting setup. Today the pair formed a bearish rejection / bearish outside bar below a new resistance level.

The pair was previously trading within an equidistant channel before breaking support on August 13th.

gbpaud daily forex chart

So where do we go from here?

A quick glance at price action from 2013 and the latest bearish flag formation gives us a great place to start.

If we use the high from March of this year as the start of the flag pole, which is a conservative approach, we get a measured objective of about 1,000 pips. That puts us right around the 1.74 area which acted as resistance in 2013.

Coincidence? Possible but not likely.

Summary: Look to either enter on a downside break of today’s candle or possible a 50% entry for a more favorable risk to reward. If the market can get past the 1.77 area the next key support doesn’t come in until our measured objective of 1.74

gbpaud daily forex chart

EURCAD analysis

eurcad price action-blur

 

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