Today’s setup is built upon Tuesday’s GBP/AUD symmetrical(ish) triangle setup for the 1-hour chart.
After breaking out out of the symmetrical(ish) triangle, GBP/AUD began moving up but kept meeting sellers along the way. As a result, price formed an easily recognizable ascending channel. The basic way to play this channel is to look for support near the bottom of the channel. And buyers seem to be taking nibbles already since the downward move has stalled.
For directional bias confirmation, the 100 SMA and 200 SMA are already in uptrend mode. Though there is a chance for a downside channel breakout given that recent price action indicates strong sellers and GBP/AUD lost bullish momentum quickly after the breakout from the symmetrical(ish) triangle.
This setup is a follow-up to yesterday’s NZD/JPY “triangular consolidation” setup on the 1-hour chart. Yeah, sorry about the shameless self-promotion. This is the last of it, I promise (for this chart art entry at least).
Price broke out of yesterday’s “triangular consolidation” setup but quickly found resistance around the 89.39 handle and was forced back down. Bullish momentum seems healthy, so for today’s play, we’ll be looking for potential support areas.
If we apply the Fibonacci tool, we can see that price is currently sitting at the 61.8% retracement level, with the 100 SMA and 200 SMA acting as dynamic support. So will support form here? Probably. Stochastic, at least, favors an upside move since it is currently in oversold territory.
If price does find support and goes up, forex traders should observe how price reacts to the previous high around the 89.39 handle. If price blows through that, the next price level to observe would be the major psychological level at 90.00.
As promised, this setup is fresh and not built upon any previous setup (that I can remember).
EUR/CAD seems to be moving in a slightly ascending channel. As of now, price is at the bottom of the channel, so we may see some buyers coming in soon. If not, then a downside channel breakout may be in play. Our moving averages are oscillating, indicating a lack of directional bias, but stochastic is moving down, pointing to potentially oversold conditions and supporting an upside move.
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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.