Intraday Chart Art Forex Update – May 27, 2015

NZD/CAD: 1-Hour

NZD/CAD 1 Hour Forex Chart

NZD/CAD 1 Hour Forex Chart

Ascending triangles are usually classified as bullish continuation patterns because they’re, well, usually found in uptrends. In this case, an ascending triangle formed in a downtrend, which is kind of weird, but a forex chart is a forex charts and I’ll take whatever I can get.

Moving on, the directional bias for this setup is to the upside because forex traders who are bullish on NZD/CAD seem relentless on attacking the price area of significant market interest around the 0.9020 handle while NZD/CAD bears seem to be losing ground, forming higher lows/troughs. But since this is a triangle we’re talking about, a downside breakout is a possibility too. Stochastic, for one, is in overbought territory, indicating that buyers may already be exhausted, paving the way for sellers to come in.

EUR/CAD: 1-hour

EUR/CAD 1 Hour Forex Chart

EUR/CAD 1 Hour Forex Chart

This is a simple descending channel, nothing more. The vanilla way to play this channel is to look for resistance near the top of the channel, and it seems like resistance has already formed since price is already on its way down. Based on the channel setup, there is still some breathing space for further move to the south and the 100 SMA and 200 SMA are in downtrend mode, with the 100 SMA acting as dynamic resistance. Stochastic, though, indicates that forex traders who are bearish on EUR/CAD may already be exhausted since stochastic is currently on oversold territory, so be prepared for an upside channel breakout just in case sellers lose steam.

USD/CAD: 1-hour

USD/CAD 4 Hour Forex Chart

USD/CAD 4 Hour Forex Chart

Looks like many forex traders are keeping an eye on this pair, thanks to the BOC’s interest rate statement later. But we’re not here to talk about fundamentals – we’re here to talk about charts, so let’s talk about this chart.

Based on the 4-hour chart, USD/CAD is approaching two price areas of very, very significant market interest: the 1.2515 handle and the 1.2450 minor psychological level. Price is currently at the 1.2450 level and seems to be finding some difficulty in getting past the said level, so there’s a good chance that resistance will form here. Also, the moving averages are in downtrend mode, supporting our directional bias. Stochastic, meanwhile, indicates that buyers may be exhausted already since it is pointing to potentially overbought conditions.

Also, if resistance does not form here, price will have to contend with the 1.2515 level next. This is just an extra tidbit and has nothing to do with the analysis, but it’s interesting to note that the 1.2515 handle has been the starting point for the USD/CAD freefall that accompanied the last two BOC rate announcements. I’ve even marked them on the chart just for you guys.

Forex Chart Settings:

Slow Stochastic: 14,3,3
100 SMA: Blue line
200 SMA: Red line

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.