If any y’all are trend riders, then huddle up ‘coz I’m serving up a Kiwi + channel pattern double special in today’s intraday charts update, with focus on NZD/USD and NZD/JPY.
NZD/JPY has been trending lower while bouncing up and down inside that there descending channel. And presently the pair is making its way higher to test the channel’s resistance area, which should be somewhere around below 79.90 and just above 79.10.
And as I say from time to time, one of the more conservative ways to play a descending channel is to look for opportunities to go short on the pair when the pair is at or close to the channel’s resistance area. As such, y’all therefore better get ready to start doing just that soon.
Do note, however, that there’s a slim chance that the pair may find resistance at 79.10 without actually testing the channel’s resistance area. After all, stochastic is already signaling overbought conditions and all that.
Also note that there’s also a slim chance for an upside channel breakout. And if the pair breaches 79.90 on strong bullish momentum, then y’all may wanna start thinking about bailing yo shorts. An upside channel breakout ain’t validated until the pair clears 80.40, though.
As y’all can see, NZD/USD has also been trending lower recently. And like NZD/JPY, NZD/USD has also been trapped inside a descending channel.
Unlike NZD/JPY, however, NZD/USD is already about to test the channel’s resistance area, which should be at or just below 0.7260. So y’all better start lookin’ for a chance to go short. And all the more so, given that stochastic is already signaling overbought conditions and all that.
Y’all may wanna wait for the pair to actually test and then bounce off the channel’s resistance, though. After all, bullish momentum on the current upswing seems rather strong, which means that there’s a higher chance for an upside channel breakout. Although the pair needs to take out 0.7340 in order to validate the upside breakout.
Anyhow, y’all may wanna prepare for both scenarios. And as usual, just make sure to practice proper risk management, a’ight?