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The theme for today’s webinar was – Triangles, triangles, triangles. The Euro is finally breaking down out of one it’s been stuck in for a little while now. USD/CAD is looking to rally out of one it just built in recent days. Crude oil is digesting losses and its taking on the shape of a triangle. We can throw in the larger one developing in USD/JPY, and for grins could also look at the one in copper discussed on Tuesday…not just looking for these patterns, they are just appearing, probably missing one or two – EUR/JPY, throw that in the mix as well.

Technical Highlights:

  • Lots of triangles out there of varying sizes and directional biases
  • EUR/USD breaking down, USD/CAD looking up
  • Crude oil yet to decide; trend says down, oversold says maybe up
  • A few more triangles; USD/JPY, EUR/JPY and Copper

For a summary of what other traders are doing in key markets, check out the IG Client Sentiment page.

EUR/USD breaking down, USD/CAD looking up

Finally, the Euro is breaking out of its triangle. It took a little time to fully form, but this morning we are seeing it break on the 4-hr and looking for validation by end-of-day on the daily time-frame. Below 11267 will have sub-11200 in focus as the November 2017 underside trend-line may come into play as support.

EUR/USD Daily Chart (Triangle breaking)

EUR/USD daily chart, triangle breaking

USD/CAD has been trending higher since October and while its been choppy it has nevertheless maintained a solid bullish bias for most of the ride higher. There is a symmetrical triangle on the 4-hr time-frame which is very nearly ready to break. It may not provide a ton of pips before reversing lower again off the upper parallel of the channel since October, but could be good for a quick 70-80 points.

USD/CAD 4-hr Chart (Triangle looking up)

USD/CAD 4-hr chart, triangle looking up

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Crude oil yet to decide; trend says down, oversold says maybe up

Crude oil has chopped around in-line with expectations as it digests the monster drop off the 2008 trend-line. This has price action coiling up into a triangle. It needs a little more time to become a mature pattern but could lead to another tradable directional move soon.

Typically, I shy away from symmetrical triangles which break out against the primary trend, but given how oversold oil became it could lead to a sizable corrective rally. So, in this this case a top-side breakout is considered ‘safer’ than usual, safer than say the one in the Euro which if it broke higher would run the risk of failing quickly as it’s not oversold and has lots of resistance.

Oil is oversold and resistance isn’t for a good distance higher. A downside break for the same reason could result in a truncated move as oversold conditions are still present with only a minimal amount of time passing since it bottomed. Keeping things simple: Follow the break and monitor momentum.

Crude Oil Daily Chart (Up or down? Wait for the break)

Crude oil daily chart, up or down? Wait for the break...

A few more triangles; USD/JPY, EUR/JPY and Copper

USD/JPY Daily Chart (Moving towards the apex)

USD/JPY daily chart, moving towards the apex

EUR/JPY Daily Chart (Triangle on trend-line)

EUR/JPY daily chart, triangle on trend-line

Copper Daily Chart (Winding up for a breakout)

copper daily chart, winding up for a breakout

Resources for Index & Commodity Traders

Whether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX