NZD/USD broke out to the downside of an ascending channel, but forex traders who are bullish on the pair aren’t giving up just yet since price is pulling back in an attempt to re-enter the channel. However, there’s a good chance that bulls will be running out of steam soon since stochastic is already indicating overbought conditions. Also, the moving averages have just crossed-over into downtrend mode. And if the bulls do run out of steam, the bears will probably be launching their offensive when or if price reaches the 0.6950 minor psychological level (dashed line) since it lines up rather nicely with the 50% Fibonacci retracement level.
As y’all can see, NZD/CAD had a clean breakout from a descending triangle, but price seems to have found fresh buyers when it reached the 0.8670 handle since it began consolidating. If price starts pulling back, the most likely pullback area would be at 0.8790 since it served as support before. In addition, it sits right smack on the 38.2% Fibonacci retracement level. There’s a chance that the pair may move lower without pulling back, however, since stochastic is already pointing down and moving away from overbought territory, which could mean that bears are in control again.
NZD/JPY has formed a rather massive symmetrical-ish triangle on its 1-hour chart. And since it’s a symmetrical-ish triangle, then that means that bulls and bears are roughly balanced, so a breakout could occur in any direction. And if a breakout does occur, the resulting rally or selloff could have enough momentum to last for around 500 pips, based on the height of the forex chart pattern. 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?
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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.