If the long-term ascending channel setup I mentioned earlier isn’t to your liking, then how about this symmetrical triangle for EUR/CAD’s 1-hour forex time frame? As you can see, the pair has been consolidating for a while. And now, the pair looks about ready for a breakout. Since this is a symmetrical triangle forex chart pattern, we don’t really have any bias. But if you consider that price is currently at the top of the long-term ascending channel I identified earlier, and if you also consider that stochastic is about to reach overbought territory, then an argument for a downside move could be made. Moreover, the 100 SMA and 200 SMA look like they’re about to cross-over into downtrend mode. It’s still a triangle, though, so an upside breakout is still a possibility.
Looks like CAD/CHF is testing the top of the descending channel again. This channel has been holding for over half a month now and may continue to keep the pair’s rallies at bay since the top of the channel lines up with the 0.7400 major psychological level. In addition, the moving averages have been in downtrend mode since the end of June and both the 100 SMA and 200 SMA are acting as dynamic resistance to boot. Stochastic is moving down from the overbought territory, but it’s already pointing up, which is worrying since it indicates that forex traders bullish on the pair may be taking control. If that is the case, then there’s a chance that a breakout to the upside may occur.
Price has consolidated into what appears to be an ascending channel (or a bullish flag) on USD/CAD’s 1-hour forex chart. The basic way to play an ascending channel is to look for support near the bottom, and for now, we are out of luck. The channel is pretty tight too, with a volatility of only around 60 pips. But if this is indeed a flag, and an upside breakout does occur, then we can expect price to move for about 220 pips since that is the height of the flag and its pole. Looking at out indicators, the moving averages are still indicating a healthy uptrend while stochastic is already indicating potentially overbought conditions, so forex traders bullish on the pair may be exhausted already.
As usual, make sure to practice proper risk management should you find a trade based on any of these charts.
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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.