Did you see that USD/CAD triangle pattern that Happy Pip traded last week? Well, the pair just reached the top of the descending triangle as she expected and is currently testing the resistance at the 1.2600 major psychological mark. If this keeps gains in check, price could head back to the triangle support right around the 1.2400 major psychological mark. Stochastic is pointing up though, which means that dollar bulls are still not giving up and might be strong enough to push for an upside break. In that case, USD/CAD could climb by around 400 pips, which is the same height as the chart pattern.
Anybody up for a countertrend trade? GBP/USD has been moving inside a rising channel on its 1-hour forex chart and is on its way to test the top around the 1.5500 major psychological level. If this holds as a ceiling, the pair could head back to the bottom of the channel and test support at 1.5400. Stochastic is already making its way down, indicating that pound bears are taking control of price action and that a selloff might take place before price even hits the top of the channel. If the oscillator hits the oversold area and starts turning up, it could reflect a pickup in buying pressure and a potential upside break!
Here’s a neat little range forming on USD/JPY’s 1-hour forex time frame. As you can see from the chart above, price has been bouncing off support around 118.25 and resistance at 119.25, creating a 100-pip range. At the moment, price seems to be finding support at the middle of the range and may make another test of resistance, especially since stochastic is climbing out of the oversold zone. If 119.25 continues to hold as range resistance, USD/JPY could head back to support once more. Just make sure you set your stops right in case a breakout takes place in either direction.
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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.