The ascending channel on NZD/CAD’s 1-hour chart that we’ve been playing again and again since September 9 finally got invalidated yesterday when the pair broke to the downside. However, the downside move was cut short when the pair got violently rejected at the 0.9460 handle. We can take advantage of this by using our Fibonacci tool to scout for a potential pullback area. And as y’all can see on the chart, the 61.8% Fibonacci retracement level seems like the most conservative one since it lines up with the 0.9600 major psychological level. The 200 SMA may even potentially act as dynamic resistance if or when price does get there.
Back on Wednesday, we were eyeing that ascending channel on USD/CHF’s chart. And if y’all can still recall, I told y’all that the momentum for the most recent downswing was rather strong, so you may want to consider the possibility of a downside breakout. Well, it looks like that was a good call since a downside breakout did occur, so give yourself a pat if you were able to jump in with a short. Anyhow, the pair found support at 0.9660 and pulled back all the way to the 50% Fibonacci retracement level. However, bears were waiting and pounced on the pair, sending it lower. Will the pair continue moving lower? I sure hope so, since stochastic is now pushing away from overbought territory. But if you’re not too sure, then you may wanna wait for a shooting star candlestick pattern to form.
Whoa! I just realized that we’re walking down memory lane! You see, that there is yesterday’s potential descending channel for EUR/CHF. And as I noted yesterday, we were looking for it to climb higher. Well, the pair did climb higher all right. However, the pair already seems to be getting weighed down by the sellers, so there’s a chance that NZD/CAD could move back down without testing the channel’s resistance area. And using our Fibonacci tool, we can see that the pair reached the 50% retracement level before it was pushed down. Also, stochastic is already signalling overbought conditions, so may wanna start looking for opportunities to go short.
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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.