Based on where we left off yesterday, price barely missed reaching the bottom of the trading range or rectangle at the 1.7320 handle, but it did rally higher all the way to the top of the range at the 1.7880 handle, so congratulations if you managed to ride that. Anyhow, since price is currently milling about near the top of the channel, then that means that we may have another trading opportunity on this pair. Stochastic is already moving away from the overbought area, so perhaps forex traders bearish on the pair are already starting to come in. The moving averages are still in uptrend mode, though, and the longer-term trend is still up, so there’s also a slim chance for an upside breakout.
Looks like there was no balance in the force between the bears and the bulls on NZD/CHF’s 1-hour forex chart since the symmetrical triangle that we identified on Tuesday got invalidated, and an ascending triangle formed instead, which means that forex traders bullish on the pair have a slight advantage over the bears. Looking at our technical indicators, the moving averages are still not helping much since they’re oscillating while stochastic is already pointing up and moving away from the oversold region, indicating that bulls may have the upper hand at the moment. Price also seems to be respecting the rising trend line that acts as one of the triangle sides, so aggressive forex traders may be inclined to trade within the triangle since there are still about 100 pips until resistance at the 0.6270 handle is reached. And if this forex chart pattern does break, then we’ll probably see a 270-pip move since that is roughly the height of the triangle.
I hope you’re not sick of triangles yet ‘coz I’ve got another one. AUD/CHF seems to be under the same circumstances as NZD/CHF since the symmetrical triangle that we identified last Friday was likewise invalidated, forming an ascending triangle in the process as well. The moving averages are also oscillating, but stochastic is acting differently since it is currently indicating potentially overbought conditions. Price is also currently testing the resistance area around the 0.6930 handle, but the bullish momentum got sapped, so perhaps this forex chart pattern isn’t quite ready to break just yet. But if it does break, then the pair could rally for around 300 pips since that is roughly the volatility of the triangle. The overall trend is down, though, and the resistance area around the 0.6930 handle happens to be a price area of significant market interest, so there’s also a slight possibility of a downside breakout. 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