Bears and bulls are playing a game of tug-of-war on NZD/JPY’s 1-hour chart, but there’s no tiebreaker yet since a symmetrical-ish triangle has emerged. Since bulls and bears are somewhat balanced, then that means that the pair could break out in either direction, so we don’t really have a directional bias. The initial move before the pair began consolidating was a down move, however, and stochastic is currently pointing down and moving away from overbought territory, so the path of least resistance seems to be to the downside for now. In any case the forex chart pattern’s height is a whopping 600 pips so a breakout move in either direction will probably last for the same amount.
GBP/NZD surged higher but quickly found sellers at 2.1480. However, the buyers are also holding their ground at 2.1290, which is why a 190-pip trading range or rectangle has formed. Price is presently making its way higher after almost touching the support area at 2.1290, so either start looking for opportunities to go long or wait until price tests the resistance area at 2.1480 before shorting. However, do note that the moving averages are in uptrend mode, with the 100 SMA acting as dynamic support to boot. In addition, stochastic is beginning to move away from oversold territory, so there’s a good chance that an upside breakout may occur. Hmmm. Now that I think about it, that rectangle also looks like a bullish flag on the higher time frames.
As I always say, one of the most conservative ways to play an ascending channel is to look for buying opportunities when price is near or at the channel’s support area. And as y’all can see, price is making its way there now, so y’all better get ready. Our technical indicators are kinda worrying, though, since the moving averages have just recently crossed-over into downtrend mode while stochastic is pointing down and moving away from the overbought area, which means that forex traders who are bearish on the pair may be in control and they may attempt a downside channel 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.