Don’t look now but NZD/CAD looks ready to break out of consolidation! The pair has been trading inside an ascending triangle chart pattern on its 1-hour forex time frame and with the range getting tighter and tighter, price might have to pick a direction soon. An upside break past the triangle resistance at .9050 could spark a 200-pip rally, which is roughly the same height as the formation, while a downside break below the .9000 major psychological support could lead to a 200-pip drop. Stochastic is moving down from the overbought zone, suggesting that Kiwi bears might take control of price action and favor a downward move.
Anybody up for a countertrend play on Cable? The pair seems to be forming a descending channel on its 1-hour forex chart and is currently testing the bottom around the 1.5300 major psychological support. A bounce from this area could take price up to the channel resistance, which is close to the 1.5550 minor psychological mark. Stochastic is heading higher for now so pound bulls might be strong enough to push for a move back to the top of the range. However, the middle of the channel might also hold as near-term resistance, as it lines up with the 38.2% Fibonacci retracement level.
Just when it seemed like EUR/AUD was ready to break below the descending triangle support on its 4-hour forex chart, euro bulls came charging back in and pushed the pair back to the top. The triangle resistance around the 1.4100 major psychological mark seems to be holding like a boss and stochastic is starting to move down from the overbought area, suggesting that another selloff might be possible. Price could drop back to the support at the 1.4000 major psychological mark and probably make another attempt at a downside break. Note that the chart pattern is around 350 pips in height, which means that a breakout move could be of the same size.
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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.