Forex markets are expected to be volatile until the summer arrives, so there are plenty of trading opportunities that traders could consider. Let’s have a look at three currency pairs through daily and weekly timeframes.
CAD/JPY – possible double bottom
After a prolonged bear market that started in November 2022, CAD/JPY seems to be forming a potential double bottom formation. The currency pair did a small false breakout below the support 94.63 and then formed a pin bar along with a strong bullish candle on the next day.
The OsMA indicator also shows the market is currently oversold, with CAD/JPY poised to move upward. The currency pair could rise to the trend line in the next few days, but it could still bounce back down from there.
CAD/JPY daily chart, source: tradingview.com, author’s analysis
That is why traders need to be cautious even though the move looks to be valid. There’s still a risk that CAD/JPY may dive below 94.63, filling the gap from the bull run that occurred between March and April of 2022. If the trend line is broken, the potential of this move is clear. Then traders could be targeting the price of one hundred – a potential of 400+ pips.
EUR/AUD’s uptrend escalates
EUR/AUD bounced from the support 1.5274 a couple of weeks ago, showing strong bullish momentum. While a pullback in the near future is possible due to a forming divergence, the currency pair could be still headed for at least a 200-pip gain. EUR/AUD is poised to rise to the resistance 1.6435, or even higher.
EUR/AUD weekly chart, source: tradingview.com, author’s analysis
EUR/AUD bounced down from the black resistance at 1.6200 to 1.5860, but then quickly reversed back up as the uptrend still hasn’t peaked. The currency pair is still currently moving sideways, but there is a crucial resistance to which it is expected to get in the next few days, which is 1.6435.
Even the OsMA indicator shows the market is currently oversold (although the chart looks overbought), meaning EUR/AUD might still create a few higher highs. After it reaches 1.6435, traders may expect a correction, but shorting it is still dangerous as the bullish momentum is still solid.
EUR/AUD daily chart, source: tradingview.com, author’s analysis
AUD/JPY sits on a crucial support
AUD/JPY has been in an uptrend since 2020, rising from 60 to almost 100 in just two and half years. That’s some solid volatility between currencies. However, AUD/JPY is now down over 1,000 pips from its peak.
The long-term uptrend is obvious, and the currency pair gives the impression it will continue in the near future.
The currency pair formed a popular trading pattern called head & shoulders, but it rarely works. AUD/JPY did a false breakout on crucial support, where it filled a bullish gap, resulting in a possible end to the current correction.
The bounce is also supported by a trend line, divergence, and 200-day moving average (EMA200). While this doesn’t necessarily mean the start of a mega uptrend, it could send AUD/JPY upward by a few hundred pips.
AUD/JPY weekly chart, source: tradingview.com, author’s analysis
The OSMA indicator was pointing to an oversold market for some time, but the bullish move got confirmed at the moment when AUD/JPY got below the support 87.06. Now if traders see the currency pair break above the trend line on a daily timeframe, it’s very likely to move to at least 90-91 in the near future.
AUD/JPY daily chart, source: tradingview.com, author’s analysis
Remember that this outlook is mainly focused on technical analysis. Any important market events can make these potential moves invalid. Moreover, make sure to play the game in a disciplined and patient matter to achieve the best results