Fancy a countertrend setup? As y’all know, the most conservative way to play a descending channel is to look for resistance near the top of the channel while looking for support near the bottom of the channel ain’t exactly the safest thing to do. Well, if you’re gangsta enough to take this setup on, just know that the volatility from the current price level and the top of the channel is around 80 pips. The moving averages are also currently indicating a healthy downtrend while stochastic is pointing up and moving away from oversold territory, so forex traders bullish on the pair may be taking control already.
Based on the 1-hour chart, it looks like NZD/CAD has been consolidating into what appears to be a potential rising wedge, which suggests further declines for the pair. The overall trend is down and the moving averages are currently in downtrend mode, which gives us more confidence in a downside move. Stochastic also just left the overbought region and is still pointing down, so forex traders bearish on the pair are possibly still in control. If the bottom of the wedge is broken with convincing and sufficient bearish momentum, then the pair could move lower for around a hundred pips since that is roughly the height of the forex chart pattern.
Looks like GBP/CHF is imprisoned inside a trading range or rectangle, with resistance at the 1.4900 major psychological level and support at the 1.4650 minor psychological level. Currently, price just bounced off the bottom and is making its way to the resistance area. In any case, there are two way to play this forex chart pattern: (1) trade within the range, or (2) wait for a breakout. In the case of a breakout, price could break either to the upside or the downside, but our main directional bias is to the downside since the moving averages are still in downtrend mode, but they’re already beginning to cross-over into an uptrend. Whether the cross-over will be completed remains to be seen since stochastic is now nearing the overbought area, so sellers may start nibbling-in soon.
As usual, make sure to practice proper risk management should you find a trade based on this or any of the other 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