Today’s play is built upon yesterday’s ascending channel setup on the 4-hour chart for GBP/AUD. Before we begin, congratulations to all those who bought near the bottom of the chart. I hope you’re enjoying your 350+ pips worth of profit. Feels awesome, huh? For those who missed yesterday’s setup, don’t worry because price has stalled now that it is close to the top of the channel. Also, stochastic is already in overbought territory based on the 1-hour forex time frame.
Let me just warn you guys that this setup is only for the stout of heart since we are looking for support at the middle of the channel instead of at the bottom. But as you can see, the middle of the channel lines up with the 50% Fibonacci retracement level. Moreover, it also lines up with the previous high around the 2.0620 handle. Of course, there’s also a chance that it will move higher before correcting, so be careful.
If the previous chart is too aggressive for ya, then check out this ascending channel on the 1-hour forex chart for GBP/AUD. As you already know, the conservative way to play an ascending channel is to look for support near the bottom. And lucky us since price has stalled right at the bottom of the channel. In addition, the current price level around the 1.1230 handle has seen significant market interest in the past, as highlighted by the rectangle. And while the moving averages crossed-over into downtrend mode a while ago, they’re back in uptrend mode now. Moreover, stochastic has been swimming in oversold territory for quite some time, so forex traders bearish on the pair may be exhausted already.
Don’t fancy channels? How about a rising wedge then? GBP/NZD has been consolidating for a while now, and it looks like it has formed a rising wedge on the 1-hour forex chart. The main directional bias for this forex chart pattern is to the downside. And stochastic supports that bias since it’s currently in the overbought region, hinting that buyers may potentially be exhausted already. As with all chart patterns, there is a chance that price will breakout in the other direction, so prudent forex traders should take that into consideration as well.
As usual, make sure to practice proper risk management should you find a trade based on any of these charts.
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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.