If you think you’ve seen that chart before, that’s probably because you still remember the descending channel setup that we identified back on Tuesday. Anyhow, the pair has moved higher from last we saw it, so the aggressive forex traders who found a trade can now give themselves a pat on the back. But for the conservative forex traders out there, you’ll be happy to know that the pair is beginning to approach the descending channel’s resistance area, so an opportunity to go short may present itself soon. It’s also encouraging to see that the moving averages are in downtrend mode and that stochastic is beginning to move down after reaching overbought territory.
Next up is that there ascending triangle pattern on NZD/CAD’s 1-hour chart. An ascending triangle is a bullish chart pattern, so our main directional bias is to the upside. The base of the triangle is only around 90 pips tall, so the rally from an upside breakout could probably last for the same amount. Do note, however, that one of the triangle’s sides lines up with 0.9470, a resistance area with strong market interest that you can even see on the higher time frames. There is therefore also a possibility of a downside breakout, especially since stochastic is also beginning to push away from the overbought region.
An ascending triangle has also formed on AUD/CAD’s 1-hour chart. This one is a bit weird, though, since ascending triangles usually form during an uptrend. But as y’all can see on the chart above, the previous intermediate trend was a downtrend. As such, a topside breakout is just as likely as a downside breakout, so make sure to prepare for both scenarios. And if or when a breakout occurs, then the resulting rally or selloff may have enough momentum for a 120-pip move. In any case, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, alright?
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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.