Aha! Looks like this descending triangle on NZD/USD’s 1-hour forex chart is still gonna hold! The pair just bounced off the pattern’s resistance and now has its sights set on the support area around the .6500 major psychological level. The moving averages are crossing back and forth, suggesting that price could stay stuck in consolidation for now. However, stochastic is moving up from the oversold region, which means that buying momentum is building up. If Kiwi bulls are able to charge, they could still push for an upside break of the triangle resistance near the .6600 mark and go for more gains. But if sellers take the upper hand, a breakdown might be in the cards. Either way, the resulting move could last by around 250 pips or the same height as the triangle formation.
Here’s another triangle pattern on a commodity currency, this time on AUD/JPY’s 1-hour forex chart. The pair has been forming higher lows and hitting resistance somewhere around 92.00-92.50, creating an ascending triangle pattern. Price seems to be on its way to the top of the triangle, which might continue to hold as resistance since stochastic is already approaching the overbought level. In that case, another move back to the triangle support near the 91.00 major psychological level might take place. If you’re thinking of shorting at the triangle resistance, better wait for stochastic to turn from the overbought zone and for reversal candlesticks to form. Oh, and don’t forget to set your stop past that spike to 92.72, too!
Last but not least is this symmetrical triangle forming on Cable’s 4-hour forex time frame. The pair is currently testing the top of the triangle around the 1.5600 major psychological level, still deciding whether to make a move back to the bottom or to go for an upside break. Stochastic is suggesting a potential selloff since the oscillator is crawling down from the overbought area while moving averages are sitting tight and barely giving any good clues at the moment. A selloff could lead to a test of support at the 1.5500 major psychological level or even a breakdown if pound bears are strong enough. On the other hand, an upside break could mean around 700 pips in gains, which is roughly the same size as the formation.
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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.