Breakout alert! EUR/CAD just busted out of its descending triangle forex chart pattern on the 1-hour time frame, signaling that further gains are likely. Price even gapped up over the weekend, which means that euro bulls are excited to charge this week. Take note that the chart pattern is approximately 200 pips tall so the resulting rally could last by the same amount. The short-term 100 SMA has just crossed above the 200 SMA, confirming that an uptrend is likely. Stochastic has already reached the overbought region, however, indicating that buyers might need to take a break soon and allow for a pullback to the broken triangle resistance.
They say the trend is your friend… until the bend at the end! So which case is it for EUR/GBP? On its 1-hour forex chart, the pair has been trading below a descending trend line and is currently testing the resistance. Stochastic seems to be turning lower and hinting at a continuation of the selloff while the 100 SMA is below the 200 SMA, also confirming that further declines are possible. However, the pair gapped higher over the weekend, suggesting that euro bulls were off to a running start. If buyers are able to keep up their momentum, an upside break and reversal could be possible this time. On the other hand, if the resistance holds, price could test its previous lows around .7125.
Last week I showed y’all a short-term descending channel on EUR/CHF but when I zoomed out to the 4-hour forex time frame, I saw this rising channel. If you’re hoping to catch the longer-term trend on a support bounce, this could be your chance since price is starting to test the channel support near the 1.0400 major psychological level. Stochastic is still moving down but is already close to the oversold area, which suggests that buyers are about to take control of price action. If that happens, the pair could resume its climb back to the channel resistance at the 1.0650 minor psychological resistance or at least until the area of interest around the middle at 1.0550.
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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.