NZD/USD has been moving ever higher while bouncing up and down inside an ascending channel. And as I always say, the most conservative way to play an ascending channel is to look for support and opportunities to go long near the bottom of the channel. However, price seems to be finding support near the mid-channel area at the 0.6750 minor psychological level, with the 100 SMA acting as dynamic support to boot. Stochastic is also pointing up and moving away from oversold territory. Again, the most conservative way to play is to go long near the bottom, so conservative forex traders should probably sit this one out. But for the aggressive forex traders, do note that there is a small chance for an upside channel breakout, especially if bullish momentum picks up. Also, the pair already attempted an upside breakout, but was quickly faded.
The ascending triangle that we found on NZD/JPY’s 4-hour forex time frame back on Monday is still intact, but since we’ve got a lot of catalysts for today, we may see a breakout just yet. Again, our main directional bias is to the upside since an ascending triangle is a bullish forex chart pattern. Stochastic is currently indicating overbought conditions, however, and resistance at 82.60 seems to be very well-defended, so there’s also a chance for a downside breakout. Also, the base of the triangle is around 990 pips high, so a rally or sell off after a breakout could last for the same amount.
Price broke past resistance around the 0.9240 handle at the third attempt but quickly found another resistance area around the 0.9330 handle, forcing price back down. However, the broken resistance at 0.9240 became the new support area, giving us a 90-pip trading range or rectangle. Forex traders who wanna trade the range should know that price is currently on its way to test the resistance area, but stochastic has yet to reach the overbought area. For those who are looking for a breakout play, an upside breakout is the most likely scenario given that the moving averages are still indicating a healthy uptrend. Anyhow, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, okay?
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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