After a massive down move, forex traders bullish began buying up the pair again, but selling interest continued to trump the buyers. As a result, a descending channel has clearly formed on NZD/JPY’s 1-hour forex chart. Price just recently bounced off the channel’s resistance area and is now making its way back down. Stochastic is also lookin’ good since its already pointing down and moving away from overbought territory. And while the moving averages are coming closer together, they’re still indicating a healthy downtrend, and the 200 SMA even acted as dynamic resistance, so there’s probably nothing to worry about.
NZD/CHF’s recent price action is pretty similar to that of NZD/JPY since NZD/CHF also fell down hard before getting some buyers who continued to get swamped by the sellers. One main difference between the channel setups for the two pairs is that the descending channel on NZD/CHF’s chart has not yet been validated since price has yet to move down from the channel’s resistance area. Things look promising, though, since price looks like it’s respecting the potential forex chart pattern’s resistance area and is even beginning to move back down. The 200 SMA even acted as dynamic resistance while stochastic is moving away from the overbought region.
Finally, we have the odd one out of the trio – an ascending channel for AUD/NZD. After a large bearish move, the pair began trading sideways while making several attempts at breaking past the support area around the 1.0580 handle. Unfortunately for forex traders bearish on the pair, the support was very well-defended and all attempts failed. The bulls then began launching an offensive and the bears are apparently losing since a potential ascending channel has formed. Price made to lift-off attempts from the channel’s support area, and the first one failed, which is a bit worrying. Stochastic is also indicating overbought conditions, which is another worrying thing. 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, 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