Yesterday’s setup was a no-go since a pullback didn’t occur and price kept charging higher. No worries, though, since the trading range or rectangle that we identified (and profited from) back on Monday is still intact. If life gives ya lemons, go and make a lemon-powered giant robot, as I always say. Price is currently approaching the resistance area around the 0.6280, so a trading opportunity may present itself soon. The only worrying thing is that the pair is already encountering some sellers and the stochastic oscillator is already pointing downward after spending some quality time at the overbought region. Aggressive traders may be inclined to find an entry already, but conservative traders should wait for price to test the resistance area first, or at the very least, consolidate for a while before going back down.
Price has been consolidating ever tighter as forex traders try to push price this way then that, but the bulls and the bears are roughly of equal strength, which is why we have this here symmetrical-ish triangle pattern. As a symmetrical-ish triangle, we don’t really have a directional bias, but the long-term trend is still down, so the path of least resistance is most likely to the downside. In any case, if the triangle does break in either direction, then the resulting rally or sell-off could potentially have enough momentum for a 320-pip move since that is roughly the height of the forex chart pattern.
Don’t look now, but I’ve got another trading range or rectangle forex chart pattern for y’all to play with. This time, I’ve got one for NZD/USD’s 1-hour forex chart. And as y’all can clearly see, price has been bouncing around inside a 160-pip trading range since late August, with resistance around the 0.6410 handle and support at the 0.6250 minor psychological level. As of today, price is already very close to the resistance area, but it seems to be getting a barrage of sellers already. Stochastic is also alread pointing down, so forex traders who are bearish on the pair may be wrestling control soon. As for the moving averages, they’re not really helping much since they’re currently oscillating. As usual, 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