As you can see, GBP/NZD is forming what looks like a bearish pennant. What makes the pattern more interesting is that it’s happening right around a falling channel support on the 1-hour time frame. An upside break could open the pair to a retest of the channel resistance around the 100 and 200 SMA levels, while a downside break could drag the pair all the way to last week’s bottom. Which way will the pair go? Keep close tabs on this one, folks!
Here’s one for the range traders out there! EUR/CAD is having trouble breaking below the 1.4675 area, which has served as a strong resistance back in August and a support in September. This time around a 200 SMA and an almost oversold stochastic signal are on the bulls’ side. Buying at current levels with stops below September’s lows is a good idea if you think that the pair will bounce back up to the 1.4900 major psychological area. Of course, you can also wait for a break below said support levels and short the euro if you think that EUR/CAD will go back down to its 1.4450 range support.
Currency crosses not your thing? How about this uptrend opportunity on USD/CAD? The pair is finding support just below the 1.3200 major psychological handle, which is also near the 100 SMA and mid-channel support on the 4-hour time frame. Oh, and check out stochastic chillin’ like a villain near the oversold territory! A long trade at current levels could get you a decent reward-to-risk ratio especially if you place your stops below the mid-channel line and aim for the previous highs. Just make sure you practice good risk management when executing your trading plans!
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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.