If y’all can still recall, we originally had a bullish flag for EUR/NZD back on March 10 when the pair was milling about at 1.5350. And since then, the pair broke to the upside for about a hundred pips.
However, sellers seem very well entrenched at 1.5430. In fact, sellers have been launching a relentless counterattack since then. As a result, the pair has been forming ever lower peaks. However, buyers have dug themselves in at 1.5220. And in the process, a descending triangle has emerged.
A descending triangle is a bearish chart pattern, so our main directional bias is to the downside. And should a downside breakout occur, then them bears would likely be gunning for the next area of interest at 1.5010.
Looking at our technical indicators, we can see that them moving averages are already in downtrend mode. Stochastic, meanwhile, is moving down already after reaching overbought territory. There’s always a small chance that the pair may break to the upside, though, so be ready to bail or switch directional bias should the pair surge past 1.5430 on strong momentum. You get my drift, dawg?
A fresh rising wedge has now formed on NZD/CAD’s 1-hour chart. A rising wedge is a bearish forex chart pattern, so we be lookin’ for opportunities to go short upon a breakout. And all the more so, given that stochastic is already indicating overbought conditions and all that. Moreover, the pair is currently milling about at the area of interest at 0.9420.
Anyhow, when or if a downside breakout does happen, then the pair may have enough steam for a 120-pip move. Heck, the pair may even move for more than 120 pips, if them bears gun for 0.9230. Just make sure the pair clears 0.9350 before you chillax, though.
Also, do note that them moving averages just recently crossed over into uptrend mode. There’s therefore a small chance that the pair may break to the upside instead. Although the pair needs to smash past 0.9480 before the upside breakout is confirmed. 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.