NZD/CAD broke out of a trading range or rectangle last week, but promptly consolidated into yet another rectangle. The 80-pip rectangle’s resistance and support areas are at the 0.9040 and 0.8960 handles respectively, and our main directional bias is to the upside since the moving averages are still indicating a healthy uptrend. Also, price recently used the 100 SMA as dynamic support for an upmove, and stochastic is pointing up and moving away from the oversold area, so a potential upside breakout is in the cards.
No fancy forex chart pattern for this chart. As y’all can clearly see, price is currently testing the price area of very significant market interest around the 81.00 major psychological level, which used to serve as resistance before NZD/JPY smashed through it several days ago. And since the pair has pulled back to the former resistance area, then we got us a textbook break-and-retest setup. Our directional bias is still to the upside since stochastic is already moving up, so forex traders who are bullish on the pair may be loading up already. And the moving averages are still in uptrend mode to boot. The moving averages are coming closer together for a potential cross-over, however, so that’s a bit worrying. Another worrying thing is the fact that price was rejected very violently when it reached the 82.50 minor psychological level since that implies very strong selling interest.
EUR/NZD has been grinding ever higher inside an ascending channel. And as I always say, the most conservative way to play an ascending channel is to look for support and buying opportunities near the bottom of the channel, so we may be getting an opportunity to buy soon since price is approaching the bottom of the channel. Looking at our technical indicators, the moving averages are indicating a healthy downtrend, but stochastic has been milling about in the overbought area for a while now, so prepare for a potential downside breakout as well. In any case, just 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