USD/CAD has been steadily climbing higher while trapped inside that there ascending channel. Price is currently near the channel’s resistance area, however, and stochastic is already indicating overbought conditions, so more conservative forex traders may want to put this on their watch-list, especially if price begins to move lower for a potential test of the channel’s support area.
I told y’all in yesterday’s Intraday Forex Chart Update to be careful when trading that rectangle pattern that we identified on EUR/AUD’s chart. And that was a pretty good warning it seems, since the pair did break to the downside. However, price has now reached 1.4590, which is a price area with very significant market interest, even on the higher time frames. And if we connect all the recent peaks and troughs, we also get that there ascending channel in the chart above, which reinforces our bullish bias. Moreover, stochastic is already signalling oversold conditions.
Looking for something to short? If you are, then check out this nifty channel pattern on NZD/JPY’s 1-hour chart. And as you can see, price is just about to test the channel’s resistance area while stochastic is just about to reach overbought territory. Not only that, the moving averages have already crossed over into downtrend mode, and it even looks like the 100 SMA has been acting as dynamic resistance. But as usual, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, okay?
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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.