Are my eyes deceiving me or is that a rising channel forming on NZD/USD’s 1-hour forex chart? The pair recently bounced off resistance at the top of the channel and may be headed back towards support just above the .7300 major psychological mark. Stochastic is almost in the overbought region anyway, which means that Kiwi bulls might need to catch a break and let the bears take over. It seems that the mid-channel area of interest is holding as support though and price might make its way back to the top of the channel around .7550 if the bulls charge right away!
Anybody up for a countertrend trade? GBP/CHF has been trading inside a descending channel on its 1-hour forex chart, indicating that a short-term downtrend is taking place. Price is testing the bottom of the channel for now and stochastic seems to be suggesting that support might hold, as the indicator is moving out of the oversold zone. A bounce from the channel support could lead a move back to the top of the channel near the 1.4700 major psychological mark. If you’d rather follow the trend, you could wait for an actual test of resistance to short this pair.
If you’re more comfortable with sideways ranges, then you might like this simple forex setup on NZD/JPY’s 1-hour time frame a little better. The pair has been pacing back and forth between support near the 88.50 minor psychological level and resistance near the 90.00 major psychological mark. Price just bounced off the middle of the range and could be gearing up for another test of resistance while stochastic is indicating that buyers are losing steam. If the resistance holds, the pair might head back south to the bottom of the range. Just make sure you set those stops right in case a breakout happens!
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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.