Well, looks like the potential double bottom that we identified on USD/CHF’s 1-hour forex chart last Friday didn’t pan out since resistance at the 0.9790 handle was just too strong, although the ascending channel still seems to be intact. For today’s play,I have two major scenarios in mind: (1) price respects the ascending channel and resumes its upward journey, or (2) forex traders bearish on the pair win out and a downside channel breakout occurs. Looking at our indicators, it looks like the moving averages just crossed-over into downtrend mode and stochastic is pointing down, so it seems like a downside breakout is the more likely scenario. The channel has been respected since June, though, so it won’t be broken easily.
NZD/USD has been having difficulty moving past support at the 0.6500 major psychological level, but forex traders bearish on the pair are relentless on their quest to continue the downtrend that ever lower peaks are created. As a result, a descending triangle has clearly formed on NZD/USD’s 1-hour forex chart. Since this is a bearish continuation forex chart pattern and because the overall trend is still down, our main directional bias is therefore to the downside. And if this triangle does break, then we can probably see a 250-pip move since that is roughly the height of the pattern. But as with all triangles, there is a possibility that a breakout will occur in the opposite direction, so make preparations for that too.
I’ve got another channel setup for y’all. This time, I’ve got a descending channel on AUD/NZD’s 1-hour forex time frame. And as most of you already know, the most conservative way to play a descending channel is to look for resistance near the channel’s top, and as luck would have it, that’s where price currently is. My only concern is that price failed to reach the middle of the channel after the last test, which implies strong bullish interest. In addition, price seems to have difficulty pushing past the 1.2000 major psychological area, a price area of very, very significant market interest, as highlighted by the rectangle. If this price area holds, then we could potentially see an upside channel breakout. Stochastic is already hinting that this is a possibility since its currently in oversold territory, so Aussie bulls may be exhausted already.
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.AUD/CAD 1-hour Forex Chart