If you’re bearish on the Loonie (or bullish on the yen), then you may want to keep an eye on that there chart. And given that the pair is currently testing the descending channel’s resistance area, I’d normally tell y’all to start looking for opportunities to go short.
However, I’d only recommend shorting here and now to the more aggressive forex traders since the support area around the 77.10 is close by. More conservative forex traders may wanna wait for either a clear downside breakout past 77.10 or a break and retest of 77.10 before jumping in.
This one’s for the Loonie bulls (or Kiwi bears) out there. As y’all can see a descending triangle pattern has formed on NZD/CAD’s 1-hour chart, which is weird because descending triangles usually form at the end of a downtrend. Still, we’ll take whatever the market will give us.
And having said that, a descending triangle is a bearish pattern, so our main directional bias is to the downside. And a downside breakout is more likely to happen because the moving averages have just recently crossed over into downtrend mode. Stochastic, meanwhile, is at the halfway point before reaching overbought territory.
Anyhow, the base of the chart pattern is about 150 pips tall, so a breakout move could potentially last for the same amount.
If you don’t really have a trading bias on the Loonie, then you may want to put the above chart in your watch-list. And as y’all can see on the chart above, CAD/CHF has formed an ascending triangle, so our main directional bias is to the upside.
However, given that a topside breakout means having to breach support-turned-resistance at the 0.7490 handle, and also given that 0.7490 is a very well-respected and has seen very significant market interest in the recent past, there’s a good chance that any upside assault may be blunted.
It’s even possible that bears would use the 0.7490 handle as a diving platform to push price lower. In any case, the triangle’s height is only about 70 pips, so a break in either direction may have enough momentum for a 70-pip move.
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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.