After an extended period of trying to push price past that there ascending channel’s support area, the sellers gave up and price is finally on its way back up again. However, the mid-channel seems to be well-defended by sellers, probably because it lines up with the 0.6650 minor psychological level. Moreover, stochastic is already indicating oversold conditions, so forex traders who are bearish on the pair may be jumping in for a potential downside channel breakout attempt. The moving averages have already crossed-over into uptrend mode, though, and the 200 even recently acted as dynamic support, so buyers may also be looking to get in.
NZD/CAD has been grinding lower while bouncing up and down inside a descending channel. And as I always say, one of the most conservative ways to play a descending channel is to look for selling opportunities near the top of the channel. And lucky us since the pair has just recently bounced off the channel’s top, and the pair even respected the 100 SMA as dynamic resistance to boot. Furthermore, stochastic is already pointing down after and moving away from the overbought area. As usual, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, alright?
Okay, I admit that that there forex chart pattern on NZD/JPY’s 1-hour forex chart is only a potential ascending channel since price action has yet to validate the formation by moving down. Also, since price is currently at the top of the channel and the moving averages are currently indicating an uptrend, then that means that this is a risky counter-trend setup and conservative forex traders should probably sit this one out. For the aggressive forex traders who are still interested, just note that stochastic is currently indicating overbought conditions and price is just under the 79.00 major psychological levels, which is a price area of interest on the higher time frames, so some sellers may be enticed to nibble soon.
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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