NZD/USD has hit bottom! Of a rising channel, that is. As mentioned in my intraday charts post yesterday, NZD/USD has been on an ascending channel since the start of the month. Right now it’s testing the pattern’s support around the .6700 major psychological handle. Not only that, but Stochastic is also chillin’ like a villain in the oversold area. The cherry on top of the opportunity is the pile of candlesticks hinting that the bulls and bears are having a nice tug-o-pips around the area. Think the bulls will win this round?
Here’s another trend play, this time on the other side of the fence. If you’re into countertrend trades, then this one is for you! Cable looks like it has just bounced from the 1.4850 area, which is right smack at a falling channel support on the 1-hour time frame. Can’t get any simpler than that! A long trade at current levels could get you a decent reward-to-risk ratio especially if you aim for the channel highs around 1.5200. Gotta be careful about making countertrend trades though, as trading against an existing trend is not for everybody.
Last one up for today is an update of the AUD/USD support we were watching yesterday. As you can see on the chart above, the pair has broken below the support and is now trading just above the .7100 major psychological handle. We’re also seeing a bit of a bounce, which could pave the way for a break-and-retest scenario. If the pair does go back to that area and you think that the Aussie is in for more losses, then a short trade at the previous support level is the way to go. A short at the broken support with stops above the SMAs and descending triangle resistance could get you decent pips if you aim for new lows.
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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.