Back on March 20, the pair was milling about below the area of interest at 1.0790. Usually, I tell the more gangsta traders out there to start lookin’ for opportunities to short. Back, then, however, I warned y’all not to be too quick to go short just yet, since stochastic is just about to enter oversold territory, which may draw in fresh bulls to push the pair higher, or even attempt an upside channel breakout.
Well, the ascending channel is still intact, so an upside channel breakout obviously didn’t happen. However, the pair did jump above 1.0790 and then climbed over a hundred pips higher. My advise was therefore right on the money.
Having said that, the pair is back at the channel’s resistance area. Also, the pair seems to have found sellers at 1.0880, a price with significant market interest, even on the higher time frames. In addition, stochastic is just about to enter overbought territory. There’s therefore a higher-than-average chance that the pair may move back down. Y’all better keep an eye on the pair as it pulls back to or just above 1.0790.
But as I mentioned earlier, 1.0880 is price area with very significant market interest. There’s therefore a chance that them bears would use 1.0880 a diving board for a downside channel breakout. Although the pair has to clear 1.0710 first before a downside breakout is confirmed.
That rather messy-looking ascending channel is an updated chart for our original channel that we found way back on March 13. And unfortunately, the pair first invalidated our original channel before surging higher for 270 pips. Y’all therefore probably bailed, unless you got top skillz. Anyway, you can’t get ’em all, dawg. Just keeping it real and all that.
Anyhow, looking at that there updated channel, we can see that the pair is at the channel’s resistance area. In addition, stochastic is already making its way back down. Moreover, resistance at 1.4260 seems to be holding. Y’all therefore better start lookin’ for opportunities to sell.
Going short here is a counter-trend play, however, which makes it extra risky. As such, more conservative traders may wanna sit this one out for now. But for the more gangsta traders out there, the pair will likely be gunning for 1.4110. And while a downside channel breakout seems unlikely for now, just know that a breakout is confirmed if the pair smashes past 1.4010 on strong 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.