Price has been respecting this ascending channel on the 1-hour forex chart for over a month now. Now, price is back near the bottom of the channel after failing to push past mid-channel resistance at the 2.1200 major psychological level. There are many technical arguments for support to form here, and I’m gonna list ’em down: (1) the moving averages are still in uptrend mode, (2) the 200 SMA is acting as dynamic support, (3) the bottom of the channel around the 2.1020 handle has seen significant market interest in the past, and (4) stochastic is moving up from the oversold region, so forex traders bullish on the pair may be gearing up to push price higher.
EUR/USD has been moving in a steady downtrend on its 1-hour forex time frame, as price made lower highs and lower lows for the past few weeks. It looks like a bounce off the descending channel’s top just took place and EUR/USD might be getting ready to test the bottom once more. Incidentally, the top of the channel lines up with the 1,1000 major psychological level. Stochastic is also currently moving down from overbought territory, so the bears may already be in control. The moving averages are also still in downtrend mode, but the distance is narrowing for a potential cross-over. In addition, price has been closing above the moving averages, so there’s a possibility for an upside channel breakout.
The conservative way to play an ascending channel forex chart pattern is to look for support near the bottom of the channel. And it looks like price is currently at the bottom of the channel. The moving averages are indicating a healthy uptrend, with the 100 SMA acting as dynamic support. Stochastic has also just arrived at the oversold area, so forex traders bullish on the pair may be taking over soon. The only problem is that the pair seem to have great difficulty pushing past resistance around the 0.9620 handle, a price area of significant market interest highlighted by the rectangle. If that resistance area holds, then we may be looking at a potential downside channel breakout.
As usual, make sure to practice proper risk management should you find a trade based on any of these charts.
Forex Chart Settings:
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.AUD/CAD 1-hour Forex Chart