Normally, I would say that the conservative way to play (that rhymes by the way) an ascending channel is to look for support near the bottom of the channel. Unfortunately, such an opportunity is not yet available since price is currently stuck at the mid-channel area. Also worth noting is that price is actually having trouble getting past a price area of very significant market interest around the 187.50 minor psychological level. The way I see it, there are three major scenarios here: (1) price breaks past resistance and moves higher for a possible upside breakout, (2) price gets rejected and moves back down to test the bottom of the channel, or (3) price is repelled and then a downside channel breakout occurs. Personally, I’m leaning more towards a downside move since trader interest around the 187.50 level is pretty intense. You can even see it if you zoom out to the higher time frames. Stochastic is pointing up, however, so forex traders who are bullish on the pair may not be exhausted just yet.
I don’t normally use the 4-hour time frame in my intraday forex charts update, but I just can’t pass the opportunity to show you guys this ascending triangle that I found on GBP/CAD’s forex chart. An ascending triangle is a bullish forex chart pattern that usually forms in an uptrend, so it’s rather weird to see it since the intermediate trend is, as y’all can see, still down, but I guess it’s all good since the overall trend is still up and the moving averages have even crossed-over into uptrend mode already. Stochastic is still pointing down, though, so bears may still be in control for now. Also, the price area around the 2.0300 major psychological level may be well-defended since it has seems to have very significant market interest, so there’s also a small chance that a downside breakout will occur instead. In any case, the triangle has a volatility of around 550 pips, so price may have enough momentum to move for the same amount should a breakout occur.
Bulls and bears are playing a game of tug-o-war on GBP/AUD’s 1-hour forex chart, but neither side seems to have a clear advantage since a symmetrical triangle has now formed. We don’t really have a directional bias since a symmetrical triangle indicates a balance of power. But looking at our technical indicators, we can see that stochastic has already reached oversold territory, so bulls may start coming in from the sidelines soon. As for the moving averages, well, they’re not really helping much since they’re oscillating. Anyhow, the triangle has a height of about 600 pips, so the resulting rally or selloff could probably last for the same amount. In any case, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, alright?
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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