EUR/CAD has been steadily trending lower while trapped in that there descending channel. And as I always say, one of the more conservative ways to play a descending channel is to look for opportunities to go short near the top of the channel’s resistance area, so y’all better start looking. However, do note that there’s a chance that the pair could attempt an upside breakout since the pair recently bounced of the mid-channel area. In addition, the pair has been respecting a rising trend line (dashed line) for a while now, and the bounce from the mid-channel area also involved a bounce from the trend line. Moreover, stochastic is moving up and away from oversold territory, which could mean that the bulls are currently in control.
The descending channel that we identified on EUR/AUD’s chart back on Wednesday is still intact, so let’s play that setup again. If life gives you lemons, go and make a lemon-powered giant robot, right? Anyhow, the pair recently bounced off the channel’s resistance area, but like the descending channel for EUR/CAD, price also found buyers at the mid-channel area and stochastic is pointing up as well, so there’s also a chance that there will be an upside channel breakout for this one. The moving averages are in downtrend mode, though, and it even looks like the 200 SMA is acting as dynamic resistance.
Looks like price just broke to the downside of a massive descending triangle. Do note that that I’m using the 4-hour time frame for this setup, which I admit is not exactly ideal for a short-term intraday setup. Anyhow, the forex chart pattern is roughly 630 pips tall, so the downside breakout that recently occurred may last for the same amount. However, price seems to be hesitating while stochastic is already indicating oversold conditions, so there’s a possibility that the pair could climb back into the triangle, so keep that in mind. 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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