The pair bottomed out around the 0.6350 minor psychological level and then began grinding ever higher. However, selling interest at the 0.6740 handle seems rather strong, but the bulls aren’t exactly giving up since they keep testing the pair against the 0.6740 handle. As a result of all that, an ascending triangle has formed. The triangle is roughly 300 pips tall, so a topside breakout may have enough momentum to move for the same number of pips. Do note that there is also a chance that the pair will break to the downside, especially since stochastic is already indicating overbought conditions, so make sure to prepare for such a scenario as well.
Reversal alert! NZD/JPY may be heading back north soon since a double bottom is potentially forming on its 4-hour forex chart, with price slowly inching ever higher toward the forex chart pattern’s neckline around the 79.20 handle. The pattern is pretty massive, with a volatility of around 500 pips, and if the pair does break through the neckline, then we can expect the resulting rally to last for the same amount. Stochastic is already indicating overbought conditions, however, so aggressive traders should think twice before opening a long position here and then gunning for the neckline area. Also note that the moving averages are still indicating a downtrend, but they’re moving closer together for a potential cross-over.
As I always say, one of the most conservative ways to play a descending channel is to look for selling opportunities near the top of the channel. Unfortunately, price is still some way away from the top of the channel. And since this is a 4-hour chart, a conservative selling opportunity may not be appearing anytime soon, but make sure to put this on your watchlist. For the more aggressive forex traders, just know that stochastic has already reached overbought territory and both the 100 and 200 SMAs seem to be acting as dynamic resistance. 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, okay?
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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