Breakout artists, huddle up! As y’all can see, the bears have been trying to breach support at the 1.7150 minor psychological level. However, bulls seem well entrenched at the 1.7150 price area, and so each attempt by the bears ultimately failed. The bears are relentless, though, and this can be seen in the ever lower highs. And it just so happens that if we connect the highs and the lows, then we get a descending triangle, which is a bearish chart pattern. And if a downside breakout does occur sooner or later, then the breakout move may have enough steam for a whopping 320-pip move.
We had that there ascending channel on EUR/NZD’s 1-hour chart in our sights back on Wednesday. And it looks like EUR/NZD finally moved lower by around 130 pips from last we saw it, so congratulations to the aggressive forex traders who managed to find an opportunity to go short on the pair. And since the pair is currently about to test the channel’s support area, then that means that the more conservative traders out there may wanna start looking for a chance to go long on the pair, especially since stochastic is already signaling oversold conditions.
NZD/JPY broke to the downside from the ascending channel that we identified last Wednesday. However, the bulls are not giving up without a fight, and what appears to be a double bottom pattern has formed. Price is currently testing the channel’s broken support area, which gives us two scenarios. The first scenario is that the pair fails to get back inside the channel and gets sent back down. Our technical indicators seem to support this, since stochastic is already indicating overbought conditions while the moving averages are in downtrend mode. The second scenario, meanwhile, is that price action validates that there double bottom pattern. And if the chart pattern is validated, then the bulls will likely be gunning for the channel’s resistance area. In any case, 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.