First up on the menu is that there newly-minted descending channel for GBP/AUD. And as y’all can, the pair broke that there well-respected rising trend line and began slowly trading lower while roughly inside a descending channel. Price is currently hesitating at the mid-channel area, but it could potentially sink lower since stochastic is already signalling overbought conditions. However, there’s a chance that the pair could go higher and test the channel’s resistance area near the area of interest at 1.7520 (dashed horizontal line). And if price does pull back to that area, then the 100 SMA may also act as dynamic resistance, which reinforces our downside bias.
Reversal alert! AUD/CAD has been respecting that there rising trend line but the pair seems to be having difficulty getting past resistance at the 0.9550 minor psychological level, so much so that a potential double top pattern is beginning to emerge. The more conservative way to play is to wait until the pair breaks past the pattern’s neckline at 0.9750. More gangsta forex traders, meanwhile, may want to jump in once there’s a clean break of the rising trend line, since that’s an early sign of a possible trend change.
Are you adventurous enough for a counter-trend play? If you are, then check out that there channel setup on AUD/CHF’s 1-hour chart. As y’all can see, price is currently testing the channel’s support area. And it just so happens that the channel’s support area lines up rather nicely with the area of interest at 0.7310. In addition, stochastic is already indicating oversold conditions, which is a real confidence booster for our upside bias. Again, this setup is a counter-trend setup, so more conservative forex traders may wanna sit this one out for now. For the more conservative forex traders who are looking for opportunities to go long based on this chart, just make sure to practice proper risk management, 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.