Intraday Forex Charts Update – Oct. 6, 2016

NZD/CHF: 1-Hour

NZD/CHF: 1-hour Forex Chart

NZD/CHF: 1-hour Forex Chart

NZD/CHF has been trending lower while bouncing up and down inside a descending channel. One of the more conservative ways to play a descending channel is to look for opportunities to go short near the channel’s resistance area. Unfortunately, price is currently testing the channel’s support area. And going long here is a counter-trend setup, so more conservative forex traders may wanna sit this one out. For the more aggressive forex traders out there, just know that stochastic is already going back down without ever reaching the overbought area. This could mean that selling interest may be strong, so be extra careful if you plan to go long here, since there’s a chance that bears may stage a downside channel breakout.

GBP/JPY: 1-Hour

GBP/JPY: 1-hour Forex Chart

GBP/JPY: 1-hour Forex Chart

An ascending triangle is a bullish chart pattern that usually forms in an uptrend. It’s therefore a bit unusual that one has formed on GBP/JPY’s 1-hour chart, given the recent downtrend. Anyhow, stochastic is already indicating oversold conditions while the moving averages have just recently crossed-over into an uptrend. These two signals support an upside move. And should a topside breakout occur, then the resulting move could potentially last for roughly 200 pips. But since the pattern formed in a downtrend, you may also want to consider the possibility that the pair may break to the downside instead.

USD/CAD: 1-Hour

USD/CAD: 1-hour Forex Chart

USD/CAD: 1-hour Forex Chart

It looks like bulls are beginning to run out of steam on USD/CAD’s 1-hour chart. After all, a rising wedge pattern has formed. Looking at our technical indicators, stochastic has already reached overbought territory while the moving averages are in downtrend mode. There is therefore a better-than-average chance for a downside move. However, price has been closing above the moving averages, so the bulls still have some fight left in them. But just in case the bulls finally lose the will to fight and a downside breakout occurs, then the pair may have enough momentum for a 250-pip run to the downside, based on the height of the chart pattern.

Forex Chart Settings:

Slow Stochastic: 14, 3, 3
100 SMAs: Blue line
200 SMA: Red line

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.