Descending triangles are usually found in downtrends, so I’ll be the first one to admit that this setup is kinda weird. But, hey, I take whatever I can get, so let’s get it on! The directional bias for a descending triangle is usually to the downside, but since price action indicates the trend is still up (although the moving averages say otherwise), it would probably be more prudent not to have a bias. That way, you can be ready for a breakout in either direction. And if a breakout does occur, then price may have enough momentum for a 230-pip moved, based on the height of the forex chart pattern. Do note that stochastic is currently pointing up again without visiting the oversold area, though, so bullish interest may be strong on this pair.
Don’t fancy breakout plays much? Then how about trading the range on the rectangle that has formed on NZD/CAD’s 1-hour chart. As y’all can see, price has been trading sideways while respecting resistance at 0.8910 and support at the 0.8790 handles, giving us a 120-pip trading range. Price is currently testing resistance at the 0.8910 handle, so y’all better start looking for opportunities to go short. However, you should also be aware that the moving averages have just recently crossed-over into uptrend mode while stochastic is pointing up, so there’s a slim chance that an upside rectangle breakout may occur.
A descending channel has now formed on AUD/CAD’s 1-hour time frame. And as I always say, one of the more conservative ways to play a descending channel is to look for selling opportunities near the channel’s resistance area. Unfortunately for us, price has already bounced off the channel’s resistance area, but it did find some buyers at the mid-channel area and is now making its way back up again, so y’all better get ready. Be careful, though, since the moving averages are now in uptrend mode. And as usual, 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.