After an upside breakout of that descending channel that we identified back on Tuesday, price began meeting sellers again. The bulls keep pushing the pair higher and higher, however. And in the process, an ascending channel seems to have formed, not to mention the fact that the moving averages have now crossed-over into uptrend mode. Price is currently near the top of the channel, though, so conservative forex traders should probably sit this one out. But for the aggressive forex traders, just note that stochastic is just about to reach the overbought area, so we should be getting some sellers very soon.
Is USD/CAD in for even more declines? Well, it seems that way since a rising wedge has formed on USD/CAD’s 1-hour chart, and a rising wedge is usually considered a bearish forex chart pattern. The moving averages are about to cross-over into an uptrend, however, which is a bit worrying. But stochastic is already moving down again after briefly touching the overbought area. Anyhow, the pattern has a height of around 300 pips, so the resulting selloff after a downside breakout is likely to have enough momentum to move for the same amount. As usual, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, okay?
CAD/CHF has been grinding ever lower while trapped inside a rather tight descending channel. And as I always say, one of the most conservative ways to play a descending channel is to look for resistance and selling opportunities near the top of the channel, which is where price is currently at. Looking at our technical indicators, the moving averages are indicating a very healthy downtrend, but stochastic is still pointing up and still a long way away from the overbought area, so there’s a slim chance for an upside breakout. And as y’all can see, price already attempted an upside breakout before, but it was quickly faded.
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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