Y’all know I’m gonna say it, but one of the most conservative ways to play a descending channel is to look for selling opportunities near the top of the channel. Presently, price is making its way to the top of the channel, so y’all better start looking. Looking at our technical indicators, stochastic is pointing up and moving away from oversold territory while the moving averages are now in uptrend mode, so do be careful since there’s a slim chance that enough buyers will be enticed to push the pair higher for a potential upside channel breakout.
NZD/CAD began trading sideways when it found support at the 0.9060 handle while encountering strong selling interest at the 0.9130 handle as well, which gives us a rather tight 70-pip trading range or rectangle to play with. Price is currently making its way down after bouncing of the top of the trading range. Stochastic is still pointing down, however, and the moving averages have just recently crossed-over into downtrend mode, with the 100 SMA acting as dynamic resistance, so chances are good that the downmove is not over yet and that a downside breakout may even be a possibility.
Looking for more trend plays? If you are, then you’re in luck since I’ve got another channel line up. This time, we’re looking at an ascending channel on NZD/CHF’s 1-hour forex chart. As y’all can see, price is approaching the bottom of the channel, so opportunities to go long may present itself soon, especially since stochastic is already indicating oversold conditions. The momentum of the bearish move is rather strong, however, so be wary for a possible downside breakout. 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