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This past week saw several markets break key levels. Those breaks could provide us with setups going into the new week. However per usual we need to see price action before putting any capital at risk.
One such pair that has been trending nicely is USDCAD. Since the bottom of the inverse head and shoulders pattern in July, the pair has gained more than 800 pips.
The most recent rally took the pair beyond former resistance at 1.1295. The market reversed this week on the back of a bearish pin bar which formed at the 1.1470 key resistance area.
Now that the market is above 1.1295, we can begin to watch for bullish price action as the market should treat this level as support.
Summary: Watch for bullish price action around 1.1295. Key resistance comes in at 1.1470 with the next resistance level being 1.1660.
We were watching GBPAUD last week for bullish price action between 1.8440 and 1.8466. The market didn’t respect this area as price broke well below it going into Friday.
That said, the market is now resting on former channel resistance. This is a “make or break” area for this pair. In other words if this market is indeed going to push higher, this is the most likely area to cause a reaction.
Here’s a look at the bull flag that has been forming since early October.
Summary: Watch for bullish price action from former channel resistance, now support. Key resistance comes in at 1.8680 with the year high residing at 1.9185.
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