Let’s give ourselves a pat on the back because the trading range or rectangle that we identified on Monday was respected, giving us 190 pips in the bag. Delicious! And now that price is back at the bottom of the trading range, that means there may be another trading potential soon, especially since stochastic is already indicating potentially oversold conditions. You know what they say, “if life gives ya lemons, make a lemon-powered spaceship.” Uh, I don’t know if I quoted that right, but that’s how the saying usually goes, I think. In any case, the only worrying thing is that the bottom of the range is actually below the rising trend line, which means that there is a possibility of further moves to the downside before going back up or even a rectangle breakout to the downside.
Well, it looks like the pair blasted right through our Fibonacci retracement setup from earlier, but no worries since we still have this descending channel on EUR/GBP’s 1-hour forex chart. As y’all know, the most conservative way to play a descending channel is to look for resistance near the top of the channel, and that’s exactly where price is currently heading. The moving averages aren’t really helping much since they’re oscillating, but the stochastic oscillator has already arrived at the overbought region, so forex traders who are bearish on the pair may start nibbling soon.
GBP/NZD has been bouncing along inside an ascending channel that has been respected since late August. And fortunately for us, price is currently testing the bottom of the channel, so a trading opportunity may soon be presenting itself. Looking at out technical indicators, the moving averages are actually oscillating, but they’re just recently crossed-over into uptrend mode. As for stochastic, it’s already at the oversold territory, so forex traders who are bearish on the pair may be exhausted already. The only thing that concerns me is that the pair seems to be having great difficulty in pushing past resistance at the 2.4550 minor psychological level. This indicates to me that seller interest is pretty strong, so there’s a slight possibility that a downside channel breakout could occur. In any case, make sure to practice proper risk management should you find a trade based on this or any of the other charts, alright?
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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