Y’all know I’m gonna say it, but I’ll say it anyway. One of the more conservative ways to play a descending channel pattern is to look for shorting opportunities near the channel’s resistance area. And lucky us since price just recently bounced off the channel’s resistance area and is presently making its way down. The moving averages look encouraging too since they’re indicating a healthy downtrend. The only worrying thing is that stochastic is already indicating oversold conditions, which may mean that the bears are out of steam already and/or the bulls are gearing up for an upward push.
Not very bearish on the euro? Then how about this ascending channel on EUR/CHF’s 1-hour chart? As y’all can see, however, price is nowhere near the forex chart pattern’s support area, so more conservative forex traders may wanna sit this one out. For the more aggressive forex traders out there, just know that stochastic has already reached oversold territory while the moving averages have crossed-over into uptrend mode, with the 100 SMA seemingly acting as dynamic support. Great, but what do they mean? Well, all of those technical signals imply that the pair has a chance of going higher without testing the channel’s support area. That’s not guaranteed, however, so make sure to practice proper risk management should you find a trade based on this or any of the other charts, okay?
Not particularly bearish or bullish on the euro? Then perhaps this rectangle for EUR/AUD will do. As y’all can observe on that there chart, EUR/AUD has been trading sideways while respecting resistance at 1.5590 and support at 1.5400, which gives us a nifty 190-pip trading range or rectangle pattern to play with. Price bounced off the rectangle’s resistance a few days ago, but found support at the halfway point around the 1.5500 major psychological level and has been milling about ever since. However, stochastic is about to reach the overbought area, so sellers may start coming in soon to potentially push the pair lower.
Forex Chart Settings:
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.