On the weekly chart of The Euro vs The Australian Dollar, we can see the complete formation of an ascending triangle. Price has been trading within the triangle since August last year. Moreover, two months ago we had a false breakout whereby a candlestick closed above the triangle, but the next one reversed prices all the way down to the lower boundary. This is why it’s important to wait for confirmation after a breakout to avoid false breaks. Recently we see another close above the triangle.
Ensuing the recent breakout, we again have to wait for further price action to confirm bullish strength. A confirmation on the lower timeframes such as the daily would give as a clear indication of whether price will continue going higher or lower.
On this week’s weekly analysis, we’re looking at The Swiss Franc versus The Japanese Yen. Bears have been very dominant for one year, as we’ve seen a waterfall of price. The descending channel is a vivid indication of the bearish superiority. However 7 weeks ago, bulls pushed price higher and we had a breakout. Previously, before the breakout, price was resisted by the upper boundary of the channel as well as being supported by the same boundary after the breakout.
Our bias on this currency pair is bullish following the breakout. However we wait for price action as usual to confirm this. A dominant bull candle would be a good indication of future higher prices.