The AUD basket has completed a nice pullback to the existing trendline off of the March and October swing lows on the Daily chart . The Aussie Dollar also bounced here at the 50 day SMA . There's a little bit of room to the previous high, and I expect the next area of resistance to be in the 0.8 area. Looking at this chart, I will be looking for a long opportunity with AUD.

Now, what to pair it with... JPY has been weak, making a nice break down. However, there's a fairly nearby area of support that the JPY could reach in a day or two. A good option to short, but there may be better options out there.

I also like the CAD. Has been creating a descending wedge pattern going back to October. CAD recently touched the top of the wedge and was rejected. Furthermore, this wedge has been at the bottom of a sharp drop from the COVID-19 movement back in February/March 2020. Definitely looking short CAD here.

Although I like CAD to the downside based on the previous charts, let's take a look at CADJPY to see which has been weaker. The pair recently broke the resistance at 81.7-81.8, and has been trending up on the daily chart . This chart definitely suggests JPY has been weaker than the Canadian Dollar .

So, let's look at these pairings. AUDCAD looks fairly close to the overall AUD basket. Bouncing off of a trendline, off of the 50 day SMA , and coming back to the middle of the Bollinger Bands . AUDJPY , on the other hand, doesn't have quite the same setup. It had a huge day on 5/2, and is up at previous resistance. This resistance level around 80.86 was touched mid-January, April 2019, and served as a minor support in mid-2018.

So, here's what we have.
  • We like the AUD to the upside, especially if equity markets remain strong this week.
  • CAD and JPY both have potential for weakness. CAD is near the top of a descending wedge pattern, while JPY has shown recent weakness.
  • Looking at CADJPY , JPY has definitely been weaker.
  • AUDCAD has a good setup, while AUDJPY is currently at a resistance level

So, what do we do with all of this information? I will be looking for setups on both AUDJPY and AUDCAD . Let's start with AUDCAD .
Daily chart had a nice move up on the last trading day (5/2). It broke through that swing low made around the 20th of January. On the 4H chart, it has made its first higher low and currently rests at the 200-period SMA . I will be looking for a break of that Moving Average, and enter on a pullback. Ideally, I will be looking for a pullback to retest the Moving Average or trend line , but we will see what happens. I will be looking primarily at the 4H chart for entries as this trade may have room to go, but will also check in with the 1H chart. I will update with any entries I take. The CAD has a fair amount of room to fall to hit the bottom of the wedge pattern, so this gives us a little space.

Although the JPY has been weaker, I don't like this setup as much. I will wait for a break of the resistance where it currently is. Should we break this level, I will wait for a pullback to enter. I will be looking at the 1h and 4h charts for entries should this happen.
Comment: Am looking to enter long should price continue it's move up. Price currently at 0.9891, with a nice bullish engulfing candle on the 1H chart. Equity futures look strong, which should be good for the AUD. Will wait for markets to open before entering.
Comment: Go time on AUDCAD. Entering at 0.9806. Stop down at 0.9765. TP1 at a 1:1 Risk:Reward ratio, right at top of previous high at 0.98471. Will move stop to entry if TP1 hit, and final TP up toward top of trend channel at 1.0 even. Nice Risk:Reward trade here if we can get a solid movement up.
Trade closed manually: Closing half here for +18 pips and moving stop to entry.