Here’s a Loonie special for those who think the beatdown its taken is finally overdone. We’ve got a consolidation breakdown on NZD/CAD and multiple signals on CAD/JPY calling out to the bulls.
I pointed out a rectangle/bullish flag opportunity on NZD/CAD, but the bears had other ideas by taking back control and turning it into a consolidation breakdown. With the bears back in control, it’s probably a good idea to take any bullish CAD/bearish NZD fundamental biases and put’em to work now.
In the updated one hour chart above, we can see a fresh bounce from the strong momentum move lower, now testing the Fibonacci retracement area, and almost back up to the 200 SMA and previous consolidation range. Look there for reversal signals back to the downside, especially if the stochastic indicator–now in overbought territory–makes a move back to the downside.
Another potential short-term Loonie long in the making is this one hour chart on CAD/JPY. I’ve highlighted three possible technical arguments the could continue to bring in the bulls in the short term:
- Double bottomish formation around the 80.60 – 80.80 area
- Break above the 100SMA & 200SMA and retest
- Stochastic showing short-term oversold conditions
I could also make an argument for rising lows and a Fib retracement, but I think the points above are enough to draw the attention of the bulls to possibly start hopping in today or next week on technicals alone.
There’s always a chance for a downside breakout, though, so just be ready to bail or even switch trading bias if the pair breaks past 81.20 on strong momentum, aight? And as usual, just remember to always practice proper risk management.
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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.