Remember that there chart? If you can’t then that’s probably because you missed Tuesday’s intraday forex charts update. But for those of you who can remember and were able to find opportunities to go short, make sure to give yourselves a pat on the back for bagging 120 pips or so. Also, all the other setups back then were successful, too, so congratulate yourselves on those as well.
Anyhow, the ascending channel that we identified on NZD/JPY’s 1-hour chart is still intact, so for today’s play, we’re looking to trade the channel again. Price is currently testing the channel’s support area and stochastic is already indicating oversold conditions, so better start looking for opportunities to go long. But also make sure to practice proper risk management as usual, just in case price invalidates the channel with a downside breakout.
As y’all can see, EUR/NZD has been grinding lower while trading within a descending channel. Price just recently used the mid-channel area as springboard to move back down shortly after bouncing off the channel’s support area. In addition, the moving averages are in downtrend mode and it looks like the 100 SMA acted as dynamic resistance. Moreover, stochastic is already indicating overbought conditions. All these technical arguments imply that selling interest is rather strong, so there’s a chance for a downside channel breakout. Such a setup is pretty risky, though, so more conservative forex traders may wanna sit this one out for now.
The 4-hour time-frame in not exactly ideal for an intraday chart update, but I can’t resist showing y’all that there massive symmetrical-ish triangle on NZD/CHF’s 4-hour chart. Anyhow, a symmetrical-ish triangle pattern means that price could break out in either direction. And if a breakout does occur, then the resulting selloff or rally could potentially last for around 500 pips, based on the height of the chart pattern.
Price action has formed higher troughs that can be connected with a rising trend line (dashed line), though, so bullish interest seems to be dominating for now. Stochastic is already pointing down and moving away from overbought territory, however, so bears may be back in control again. If the bears can break the rising trend line, then a downside breakout would be more likely, but if the rising trend line hold, then probability shifts towards a potential upside breakout.
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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.