Forex Blog

Two very similar chart patterns have become evident on the weekly charts of two closely related and correlated currency pairs — AUD/USD and NZD/USD. The trades should be approached with caution as taking them both doubles your risk exposure to the US dollar appreciation. This is even more dangerous for my own situation as I am already bearish USD via EUR/USD and USD/CHF pairs.

On the chart screenshots below, you will see the yellow lines marking the patterns (the flag and the pennant) themselves — the poles and the consolidation areas’ borders. The stop-loss levels of my pending orders are marked with red horizontal lines. The take-profit levels of my expected trade setups are shown with green horizontal lines.

AUD/USD — Bullish Flag

This Forex pair is demonstrating a stable uptrend since March 2020. The recent consolidation took form of the flag pattern and can be used for a bullish breakout trade.

You can download a chart template for MetaTrader 4 for this AUD/USD pattern.

Update 2021-02-15: As the previous week had closed well above the upper border of the flag, a long position was opened today at midnight GMT. The entry price is 0.77639 with stop-loss at 0.75630 and take-profit at 0.83924:

NZD/USD — Bullish Pennant

The long-term behavior of NZD/USD is very similar to that of its Australian counterpart, but the current consolidation took the form of a bullish pennant rather than a channel.

You can download a chart template for MetaTrader 4 for this NZD/USD pattern.

Update 2021-02-15: Similarly to the AUD/USD flag, a close above the upper border prompted a buy trade today at midnight GMT. The entry price is 0.72186 with stop-loss at 0.70826 and take-profit at 0.78088:

Both pattern setups can be traded using my free Chart Pattern Helper EA.

If you have any questions or comments regarding these flag and pennant patterns on the AUD/USD and NZD/USD charts, please feel free to post them via the form below.