The potential double top reversal pattern we identified last Thursday turned out to be a great trade since the pair went in our favor for around 200 pips or 320 pips depending on whether you entered at the “top” or from the neckline. If you were able to ride that, then congratulations, but if not, worry not since we may have another trading opportunity soon. As y’all can see, price is currently testing the 133.70 handle. What you can’t see is that the 133.70 handle is a price area of very significant market interest, even on the higher time frames. Given that price is testing an area of interest, there’s a very good chance that a pullback will occur. And if we apply our Fibonacci tool, we can see that all three retracement levels look valid, but I personally favor the 50% retracement since it’s the closest to the previous neckline/potential resistance at 135.00
Do y’all remember last Friday’s counter-trend ascending channel setup for this pair? Well, it turned out to be a success, too. In fact, it was so successful that price broke right through the channel. However, price is now approaching a potential support area at the 0.7080 handle, a price area which has seen some market interest in the recent past. And if we use our handy-dandy Fibonacci tool, we can see that the price level lies roughly between the 50% and 61.8% retracement levels. Also, the moving averages are still indicating an uptrend and they won’t be crossing over any time soon. Furthermore, stochastic is currently indicating potentially oversold conditions, so forex traders bearish on the pair may be exhausted already. Still, price has been closing below the 100 SMA and 200 SMA, so there’s also a possibility that price will continue moving downwards instead.
No fancy forex chart patterns or Fibonacci retracements for this chart. What we have here is a plain vanilla trend line bounce. EUR/CAD has been respecting a rising trend line since early July. Now, it’s testing the trend line yet again. And looking at our indicators, it looks like stochastic is already moving up and away from oversold territory, so forex traders bullish on the pair may be taking control. As for the moving averages, well, they’re oscillating, so they aren’t really helping much. 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