CAD/JPY has been slowly trending higher inside an ascending channel. And while it had some initial difficulty moving past the 79.50 minor psychological level (dashed line), price managed to push past that before being pushed back down again, and now price is attempting another upside move, so you better keep a close eye if you are bullish on the pair.
A textbook ascending triangle has now formed on NZD/CAD’s 1-hour chart. An ascending triangle is a bullish continuation chart pattern, so our main directional bias is obviously to the upside. And if an upside breakout does happen, the pair could push higher for about 180 pips, based on the height of the pattern. Looking at our technical indicators, the moving averages are indicating a very healthy uptrend, but stochastic is signalling overbought conditions, so a breakout may not be forthcoming yet, and more aggressive forex traders can take advantage of that by trading within the triangle.
A triangle pattern has also formed on AUD/CAD’s 1-hour chart, but directional bias on this one is not as clear since it’s a symmetrical triangle pattern. But just in case a breakout in either direction does occur, just know that the resulting rally or selloff may have enough steam for a 200-pip move since that is also roughly the height of the triangle. A quick glance at our technical indicators shows that an upside breakout is probably the more likely scenario since the moving averages are in uptrend mode and both the 100 and 200 SMA have been acting as dynamic support areas. Also, stochastic is about to reach oversold territory 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.