Looks like the trading range or rectangle that we identified on EUR/NZD’s 1-hour forex chart back on Monday is still intact. By the way, if you found a trade based on Monday’s setup, then you were probably able to grab about 200 to 300 pips, so congratulations. If you missed that setup, don’t worry since price is now moving up after testing the support area around the 1.7370 handle. Stochastic is also pointing upwards, and moving away from oversold territory, so forex traders bullish on the pair may be in control already. The only thing that worries me is that the moving averages are now clearly in downtrend mode, so there’s a possibility that any upward movement would only be a pullback for an even bigger move to the downside.
EUR/CAD has been bouncing up and down inside an ascending channel since the start of September. As y’all know, the most conservative way to play an ascending channel is to look for support near the bottom of the channel. And lucky us since that’s where price is currently at. Looking at our technical indicators, the stochastic oscillator is already pointing upward and moving away from the oversold region. The moving averages, meanwhile, are oscillating, so there’s no clear trend, but our directional bias to the upside since an ascending channel is a bullish forex chart pattern.
Nothing fancy on this forex chart; just a plain and simple rising trend line. As y’all can see, price has tested this rising trend line four times already. Also, price is approaching the trend line again for a potential fifth test, but the lack of higher peaks makes me have doubts on whether or not the trend line will hold. As I see it, there are two major scenarios here: (1) the trend line holds and the pair goes back up, or (2) the trend line is broken and a selloff occurs. Other than the trend line, we don’t really have other technical arguments for the first scenario, though, since the stochastic oscillator is already pointing downwards while the moving averages have already crossed-over into downtrend mode. 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?
Forex Chart Settings:
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