Is USD/CAD’s rally over? The pair appears to be forming a double top, which is a classic reversal pattern, on its 4-hour forex chart. Price is still a few pips away from completing the second top and testing the neckline though, so you might want to sit tight for a while. Stochastic is almost in the oversold area anyway, which means that a quick bounce might take place before the pair heads any lower. A break below the pattern’s neckline around the 1.0850 minor psychological mark could mean the start of a downtrend, which might last by as much as 150 pips.
Up for a trend play on the Kiwi? Then you might wanna consider this rising channel play on NZD/JPY’s 1-hour forex chart! Price has already found support at the channel support near the 86.50 minor psychological level and is showing upward momentum, possibly all the way up to the top of the channel near 88.00. A weak rally might last until the mid-channel area of interest at the 87.50 minor psychological handle, as stochastic is already close to the overbought zone. Make sure you set your stop below the channel bottom if you’re thinking of going long!
Here’s another potential channel play on GBP/CAD’s 4-hour forex time frame. The pair is gearing up for a test of the channel support at the 1.8000 major psychological level, with stochastic almost in the oversold territory. If support holds, price could bounce back to the channel resistance at the 1.8400 handle or until the middle of the channel around the 1.8250 minor psychological level. Bear in mind that this is a countertrend setup though, so you might be better off waiting for the oscillator to cross higher or for reversal candlesticks to form before jumping in.
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.