If you’re getting a sense of déjà vu when looking at that chart, that’s probably because that there is an updated chart of the descending channel pattern that we have been playing since November 22. The last time we took a look at the pair was on December 1. And since then, the pair climbed over 100 pips, dove for about 150 pips, and then climbed back for another 150 pips. So, yeah, that chart pattern has been a gift that keeps on giving.
Presently, the pair is already making its way back down after almost testing the channel’s resistance area. Today’s play is therefore about riding the downswing, so y’all better start looking for opportunities to go short. Do note, though, that stochastic is already signaling oversold conditions, so there’s a chance that the pair may stage an upside breakout instead. And if there is an upside breakout attempt, bulls will likely try to smash past the area of interest at 0.8470, so keep an eye on that.
We’ve got a fresh ascending triangle on GBP/AUD’s 1-hour chart. An ascending triangle is, as the name implies, a bullish chart pattern. Our main directional bias is therefore to the upside. And should an upside breakout occur, then the pair may have enough momentum for a 250-pip run. Of course, there’s always a chance that the pair may break to the downside instead, so prepare for such a scenario as well and always make sure to practice proper risk management.
Like the channel for EUR/GBP, that there ascending channel on GBP/CHF’s 1-hour time frame is also actually pretty ancient (by intraday standards). We first played that setup back on November 29 and we last checked up on it on December 2. Back then the pair was already testing the channel’s resistance area, so we were looking for it to go down. Instead, the pair climbed higher for about 130 pips in an upside channel breakout attempt. The attempt failed, as y’all can see, since sellers seem well-entrenched at 1.2860. Anyhow, the pair is currently near the channel’s resistance area, so get ready to look for shorting opportunities again. More conservative forex traders should be aware that shorting near the channel’s resistance area is a counter-trend setup and extra risky, though.
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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.