Well, it looks like yesterday’s potential trading range or rectangle on EUR/NZD’s 1-hour forex time was just that – a potential. In its place, a confirmed double bottom has formed, which is why I’m face palming right now since I failed to notice it yesterday. Anyhow, the forex chart was just recently validated when price broke through the neckline at 1.6500, so there may be time to get in… at your discretion, of course. The pattern’s height is around 250 pips, so it will probably have enough momentum to move for the same amount. Stochastic is already indicating overbought conditions, though, so be careful if bullish momentum fails to develop since that may mean that the trading range could still be in play.
Y’all remember what I said back on Monday with regard to the descending channel on AUD/NZD’s 1-hour forex chart? Do y’all remember my concern that the bearish momentum seems rather weak for some reason, and that I cautioned y’all to be careful since there’s a chance for a temporary channel break to retest the support-turned-resistance area at 1.0650, or even a full-blown upside breakout? Well, my concerns were validated because we got a full-blown upside breakout, so congratulations if you played that setup with a breakout in mind. In any case, price has now reached a price area of significant market interest around the 1.0870 handle, and stochastic is already in overbought territory, so there’s a chance that resistance will form and a pullback will occur. And if we apply our Fibonacci tool, we can see the potential pullback areas. I personally prefer the 50% retracement level since it’s sandwiched between the 1.0700 major psychological level and the 1.0650 minor psychological level.
The last time we looked at CAD/CHF (last Friday), we identified a small 80-pip symmetrical-ish triangle on its 1-hour forex chart. And if you were able to get in when that forex chart pattern was broken, then give yourself a pat for getting 80 pips in the bag. Even better, CAD/CHF’s price action has recently formed a pretty obvious ascending channel and price is currently on its way to test the bottom of the channel. Now, you already know what I’ll say, but I’ll say it anyway. The most conservative way to play (that rhymes, by the way) an ascending channel is to look for support near the bottom of the channel. And we got our technical indicators on our side since stochastic is already indicating oversold conditions while the moving averages are showing a healthy uptrend. 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