Is GBP/CAD in for more declines? Well, that’s probably in the cards, since a rising wedge seems to have formed on the pair’s 1-hour chart. In addition, stochastic is currently pointing down and moving away from overbought territory. The forex chart pattern has a height of around 270 pips, so a downside breakout would likely have enough momentum to move for the same amount, but take note that the moving averages have just recently crossed-over into downtrend mode, so there’s a small chance that price will continue moving higher instead.
Looks like CAD/JPY is consolidating into a rather massive symmetrical-ish triangle. This means that bulls and bears are duking it out but neither side has a real edge, so we don’t really have a directional bias and the forex chart pattern could break in either direction. But looking at the chart, we can see that price has been closing below the moving averages, and the moving averages are even coming closer together for a potential cross-over into downtrend mode. Stochastic is also about to reach the overbought region, and price just bounced off the triangle’s resistance area. Overall, a downside move seems to be the path of least resistance. In any case, the triangle has a volatility of about 750 pips, so a breakout in either direction may last for the same number of pips.
One of the most conservative ways to play an ascending channel is to look for buying opportunities when price is near the channel’s support. Unfortunately, price already moved higher without touching the channel’s support area since the 200 SMA acted as dynamic support. Price seems to be having difficulty passing past the mid-channel area, however, and stochastic is about to indicate overbought conditions, so the pair may be on its way back soon, and we may get an opportunity to board. Be wary if bearish momentum is strong, however, since that may mean that bears are attempting a downside channel breakout. 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