If that there chart seems familiar to ya, that’s probably because you were able to catch Monday’s intraday chart update. Back then, we were mulling over whether the pair would follow the new ascending channel or the older descending channel. And, well, based on how price action played out, it’s clear that the pair is now following the new ascending channel.
Presently, the pair is making its way down towards the ascending channel’s support area, so y’all better get ready to start looking for opportunities to go long soon. However, the pair already seems to be getting buyers at the mid-channel area. In addition, the 100 SMA appears to be acting as dynamic support.
More aggressive forex traders may therefore want to consider the possibility that the pair may be moving back up again without testing the channel’s support area. For the more conservative forex traders, however, just note that stochastic is already indicating overbought conditions. There is therefore a chance that the bears aren’t out of steam just yet, and they may still gun for the channel’s support area.
CAD/JPY has recently been grudgingly making its way higher after trending lower for some time. So, is CAD/JPY in for more moves to the downside? Well, there’s a higher-than-average chance that the pair may be heading down soon. After all, a rising wedge pattern has now formed on its 1-hour chart. Moreover, stochastic has been milling about the overbought area for some time. And should a downside breakout occur, then the resulting selloff could potentially last for around 180 pips, based on the height of the pattern. Just keep in kind, though, that there’s always a chance that the pair would break to the topside instead.
Price action on CHF/JPY’s 1-hour time frame is kinda similar to that of NZD/JPY’s. Heck CHF/JPY’s descending channel was even invalidated via a new ascending channel. Anyhow, this chart is actually an updated chart from last Friday’s intraday chart update. Also, the pair moved over 150 pips since last we saw it, so congratulate yourself if you were able to hitch a ride.
And for today’s play, the pair just recently broke past the ascending channel’s resistance area. And it just so happens that the channel’s resistance area lined up with the the 105.50 minor psychological level, which is a price area with significant market interest. You can even see price reacting to it on the higher time frames. The break is therefore kinda significant and it has just started to boot. The only worrying thing here is that stochastic is already signaling overbought conditions, since that may attract enough bears to fade into the breakout attempt.
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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.