It’s a fresh trading week, so let’s start it right with a couple of fresh short-term channels on NZD/USD and NZD/CHF in this week’s first intraday charts update.
NZD/USD has been trading ever lower recently. And if we connect the most recent peaks and troughs, we can see that a fresh descending channel has formed for us to play with.
The more conservative way to play a descending channel is to look for opportunities to go short when the pair is at or close to the channel’s resistance area.
However, the pair is currently at the channel’s support area, so we’ll have to wait a bit until the pair pulls back up again to test the channel’s resistance area, which should be at or just above 0.7060. Although there’s a chance that the pair may reach as high as 0.7130.
But if the pair continues moving higher past 0.7190, then that may be a good time to bail yo shorts. After all, if the pair climbs all the way there, then that means that the channel is invalidated and bulls are likely in control.
Price action on NZD/CHF’s 1-hour chart is similar to that on NZD/USD’s 1-hour chart. And like on NZD/USD’s chart, a descending channel has formed on NZD/CHF’s 1-hour chart as well.
And also like on NZD/USD, the pair is unfortunately testing the descending channel’s support area, so we’ll have to wait it out on this one as well.
The technical arguments in favor of a pullback on NZD/CHF is more compelling, though. After all, the pair is currently hesitating at 0.7080, which is a price area which has seen significant market interest recently.
Stochastic is already signaling overbought conditions and all that, however, so there’s also a chance that the pair may break lower past 0.7080 instead.
But if the pair does pull back, then resistance will likely form somewhere between 0.6980 and 0.6950. Just be ready to bail yo shorts or even switch bias if the pair clears 0.7030, though.
In any case, just make sure that you always practice proper risk management, a’ight?