Let’s start with that there triangle setup for NZD/USD. As y’all can see, the bulls have been pushing the pair ever higher. However, more bears have been piling on when the pair reached the 0.7300 major psychological level, so much so that the pair began tapering into a point, forming a symmetrical triangle in the process. The pair could breakout in either direction, so it’s prudent for us not to have a directional bias. The 0.7300 level has significant market interest, though, even on the higher time frames. A downside breakout is therefore more probable. In any case, if a breakout does occur, then the pair could move higher or lower for about 200 pips, based on the height of the pattern.
A chart pattern has also formed on AUD/USD’s 1-hour chart. This time, we’ve got a descending channel to play with. More conservative forex traders may wanna sit this one out, though. After all, price is currently at the channel’s support area, and going long there is a counter-trend setup. But for those of you who are gangsta enough to take on a counter-trend trade, just know that stochastic is already signalling oversold conditions, so chances are good that bulls may be enticed to jump in sooner or later.
Does that chart look familiar? If it does, that’s probably because you saw this Wednesday’s bearish pennant on USD/CHF’s 1-hour chart. And as y’all can see, the pennant did break to the downside, so give yourself a pat on the back if you were able to ride it down. But if you missed the initial breakout move, worry not since the pair seems to be pulling back. And using our Fibonacci tool, we can see that the pair is about to reach the 50% retracement level. And that retracement level just so happens to line up with the 0.9600 major psychological price area (dashed horizontal line). There is therefore a better-than-average chance that resistance will form.
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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.