Sup, fam! Let’s start this week’s intraday charts update by checking up on our old setups on AUD/NZD and NZD/CAD. And y’all know that we’ll be lookin’ for fresh plays as well.
Well, check that out, dawg! That’s right! Resistance at 1.080 did hold and the pair tested the channel’s support area at 1.0950, which is 130 pips away. So if you were able to ride this down, then congratulations. Aww, yea!
Anyhow, the channel is still intact and the channel’s support area seems to be holding. Today’s play is therefore to play the channel again by lookin’ for an opportunity to go long.
And if the pair does move back up again, then them bulls will likely be gunning for the channel’s support area, which should be somewhere between 1.1040 and 1.1010. Just be ready to bail if the pair blows past 1.1080.
Do note, however, that going long inside a descending channel is a counter-trend setup and extra risky. As such, only the gangsta traders should even try. For the more conservative traders out there, y’all are advised to wait until the pair tests the channel’s resistance area before going short again.
Also note that stochastic is already signaling overbought conditions and all that. There’s therefore a slight risk that the pair may continue moving lower and attempt a downside channel breakout. And if that happens, then them bears will likely be shooting for 1.0860 next.
If y’all can still recall, we had a descending channel on NZD/CAD’s 1-hour chart way back on September 11. In fact, y’all can still see it on that there chart.
Back then, the pair was hesitating at 0.8860, so we were lookin’ for a chance to go short on the pair. And, well, the pair did go back down before encountering support at 0.8760.
The pair then traded sideways after that before tilting higher, invalidating our descending channel while forming a fresh ascending channel in the process. And obviously, we’ll be playing that fresh ascending channel.
And presently, the pair is pushing away from the channel’s resistance area and making its way back down. Y’all therefore better be ready to start lookin’ for an opportunity to go long on the pair soon.
As to where support will likely form, the mostly likely areas are between 0.8860 and 0.8820. But if the pair goes lower past 0.8820 and takes out 0.8760, then all bullish bets are off since that means that bears are in control.
Do note, however, that stochastic is already signaling oversold conditions and all that. There’s therefore a chance that the pair may stage an upside channel breakout instead, although that seems unlikely at this point. But if that scenario does play out, then them bulls will likely be shooting for 0.9010.
In any case, just make sure to practice proper risk management, a’ight?