EUR/CAD has been trending lower while bouncing up and down inside a descending channel, as y’all can see on the chart above. As y’all can also see, price is presently testing the channel’s support area, so there’s a chance that the pair could move higher while gunning for the channel’s resistance area, especially since stochastic is already signalling oversold conditions. Such a setup would be a counter-trend setup and therefore extra risky, however, so more conservative forex traders may wanna sit this one out for now.
EUR/GBP violated a rising trend line (dashed line) after getting rejected at the 0.7890 handle. The pair then attempted to climb back above the trend line, but continually failed until it got close to resistance at 0.7890 and got swamped by fresh sellers. In the process, what now appears to be a double top pattern has formed, so sound the reversal alert. Our technical indicators aren’t supportive of further moves to the downside, however, since stochastic has already reached oversold territory while the moving averages are in uptrend mode, with the 100 SMA seemingly acting as dynamic support, so there’s a chance that the double top may get invalidated. But if the pattern is confirmed, then the pair may have enough steam for a 120-pip move based on the height of pattern.
NZD/USD started a new uptrend in the last days of May then consolidated when it reached the 0.6950 minor psychological level until it formed a bullish flag pattern. The pair finally broke to the upside and climbed higher until it encountered resistance at 0.7150, another minor psychological level. Will a new bullish flag pattern form? Well, it sure looks like one is forming now. And if the pattern is validated by an upside breakout, then the resulting rally may last for around 200 pips, based on the height of the flag and its pole.
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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.