One of the more conservative ways to play an ascending channel pattern is to look for opportunities to go long near the channel’s support area. And lucky us since that’s where price is currently at. However, the pair hasn’t really tested the channel’s support area yet and stochastic is about to reach overbought territory, so there’s a chance that the pair could move lower still, although the 200 SMA also seems to be acting as dynamic support.
More conservative forex traders may wanna avoid this one since the pair recently bounced of the channel’s resistance area, but now appears to have found some buyers at the mid-channel area, with the 200 SMA acting as dynamic support as well. Stochastic is signalling overbought conditions, though, so sellers may start jumping in sooner or later to send the pair lower while gunning for the channel’s support area. Anyhow, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, okay?
The opposite is happening on NZD/JPY’s 1-hour chart since the pair recently bounced off the channel’s support area only to find fresh sellers at the mid-channel area. Looking at our technical indicators, the moving averages are now in downtrend mode, although the signal is weak since they’re essentially oscillating. Stochastic is indicating overbought conditions, though, so there’s a chance that the pair could move back down again.
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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.