Yo! The last time we took a look at EUR/NZD was way back on January 23. And back then, we had a Fibonacci setup in play, and we was lookin’ to short the pair when it was at the 38.2% retracement level, which was around the 1.4930 handle. And since then, the pair has moved for over 400 pips. Aww, yea!
Anyhow, if we take the most recent price action into account, we can see that a fresh descending channel has formed. Presently, the pair is bouncing off the channel’s support area. And them bulls are likely gunning for the channel’s resistance area, which should be around the area of interest at 1.4730. Y’all therefore better get ready to start lookin’ for opportunities to go short soon. And all the more so, given that stochastic is about to reach overbought territory.
Last Friday, we identified that there descending triangle on NZD/CAD’s 1-hour chart. A descending triangle is a bearish forex chart pattern so our main directional bias was to the downside. But as I also noted back then, the triangle formed at the end of an uptrend. Moreover our Fibonacci play from our January 26 intraday chart update was still active. I therefore told y’all that y’all might as well consider an upside breakout scenario also. Also, I told y’all to keep an eye on the price areas of interest at 0.9600, should the pair stage an upside breakout.
Well, as y’all can see, the pair did stage an outside breakout and then moved over 100 pips from the breakout point. So give yo self a pat on the back if ya were able to ride the up move. But for those of ya who missed the breakout move, worry not since the pair seems to be pulling back to 0.9600. Make sure to wait until support at 0.9600 forms before jumping in, though, since stochastic is still some way away from oversold territory. There’s therefore a chance that the pair could move lower. Also, you may wanna bail or even switch to a bearish bias if the pair smashes past 0.9400 with great momentum. In any case, just make sure to practice proper risk management, a’ight?
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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.