USD/CAD found solid support around the 1.2690 handle and surged higher after the second rejection, forming that there double bottom pattern. Presently, the pair is reluctantly pulling back down after encountering sellers at the 1.3080 handle, which serves as the pattern’s neckline. But where will price likely pullback to? Well, applying our Fibonacci tool, price is currently testing the 38.2% retracement level, but as y’all can see, the 50% and 61.8% retracement levels look like good candidates for a pullback as well since they all line up with price levels that have seen some market interest. If price keeps moving lower past the 61.8% retracement level, however, then it would probably be safe to say that the pattern is invalidated. But if the pattern is validated and an upside breakout occurs, then the pair could climb higher for about 390 pips, based on the height of the pattern.
EUR/CAD has been steadily moving lower inside a rather messy-looking descending channel. And as I always keep saying, one of the more conservative ways to play a descending channel is to look for shorting opportunities near the channel’s resistance area. Price is currently near the channel’s support area, though, so more conservative forex traders may wanna stay away from this one. For the forex traders who are gangsta enough for a counter-trend play, however, just know that stochastic is about to reach oversold territory and price action indicates that buyers have set up their defenses around the 1.4340 handle. Anyhow, just make sure to practice proper risk management, okay?
No fancy chart patterns for this one. This here is just a plain vanilla Fibonacci play. And for today’s play, we’re looking for opportunities to go short on the pair after that rather strong bearish momentum. And applying our Fibonacci tool, it looks like the 50% retracement level looks like the best spot for a retracement since it lines up very well with the 73.50 minor psychological level, which is a price area with very significant market interest, even on the higher time frames. Also, 73.50 recently served as support before the strong bearish momentum allowed the pair to smash through it. Stochastic is still some distance away from overbought territory, though, so the pair could potentially blow past the 50% retracement level, so do be careful.
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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.