Where to, EUR/CAD? The pair is currently stalling at the middle of its descending channel on the 1-hour forex time frame, still deciding whether to head lower or to make another test of channel resistance. A break below the 1.4100 major psychological level could mean that euro bears are ready to push the pair lower, possibly until the 1.4000 major psychological level or channel support. Stochastic seems to be suggesting that a bounce is likely, as the indicator is moving out of the oversold area. In that case, price could move towards the channel resistance around 1.4150.
Reversal alert! I’m seeing a double top forex chart pattern forming on EUR/AUD’s 1-hour time frame, hinting that the pair’s recent uptrend might soon turn. The pair has yet to break below the neckline around the 1.4400-1.4450 levels before confirming that a longer-term downtrend is underway. Stochastic is climbing higher for now, which means that sellers need to gather a bit more energy for a downside break. If price bounces off the neckline support, another top might be formed at the 1.4800-1.4900 area.
Here’s another potential trend play that you might be interested in! EUR/GBP is also moving inside a falling channel on its 1-hour forex chart, and price just came off a test of channel resistance. Further selling pressure could mean that a move towards the channel support near the .7350 mark is likely, although stochastic is already indicating oversold conditions. If you’re gutsy enough, you could take a countertrend setup with the channel bounce and aim for the top of the range around the .7400 major psychological resistance. Just make sure you set your stop outside the channel if you’re trading this one.
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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.