During the recent weeks Winners Edge Trading has released an entire series on trend lines and how Forex traders can use trend lines for their trading decisions. This article will use these trend line articles to review and analyze today’s Forex market and make a watch list of interesting pairs and setups.
The GBPAUD is in a chart pattern called the contracting triangle or wedge. Price is posting higher lows but also lower highs, which is a classical sign of a range. So which trend lines are important?
The red and dark green trend lines are the main ones to monitor: a breakout above resistance or below support is the main breakout scenario although waiting for the confirmation of a break is also merited. The other trend lines are good to keep on the charts to remember where the targets are located.
The USDCAD is also caught in a tight consolidation zone. The green trend lines represent the falling wedge chart pattern which is often a reversal signal. The longer term trend is certainly still pointed up (green arrow) so a break of the falling wedge could indicate the continuation of the bullish momentum.
- Bullish space is visible above the rising wedge and resistance (green zones);
- Bearish space is visible up on the break of support (blue & green) trend lines (red zones);
- Price is now in ‘neutral’ territory (blue zones).
The EURUSD downtrend gave way for a massive bear flag consolidation (blue channel lines). Price is clearly at a decision spot:
- The break of support for a bearish setup or;
- The bounce at support for a bullish rally and further extension of the consolidation.
The screenshot shows you where I mentally have placed the bullish, bearish, and neutral zones (circles) and likely bouncing spots (arrows) depending on the trend lines:
The GBPJPY is rebounding back up strongly after an even sharper decline. The ‘Ferrari’ of the currency market has stalled at the -27.2 target after bouncing at the 38.2 Fibonacci retracement level. If price is able to make it up towards the -61.8 target then it would need to break through various layers of resistance. Bearish territory is only visible after a break of various support lines and channels. Please see this screenshot for the full visual picture.
Remember that these 4 currency pairs have interesting trend lines but before they can be actually traded it is always recommended to wait patiently for confirmation of one’s analysis as to remove the bias from our views on the charts and potential setups.
As our help to traders, we are offering you the opportunity to post your charts and got review for free of charge: pick a chart and draw all of the relevant trend lines on it. If possible, indicate or write which zones are bearish, bullish or neutral. Then after that we will post our feedback on it. Looking forward to your charts!
Thanks for sharing and wish you Happy Trading!
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