Wassup! Today’s intraday charts menu is for the breakout chartists out there. Specifically, I’m serving up a couple of triangle setups for GBP/NZD and NZD/CAD. Get ’em while they still fresh, yo!
Back on May 5, we found a potential double top pattern on GBP/NZD’s 1-hour chart. Unfortunately, the most recent price action ended up invalidating that pattern. However, we got us what looks to be an ascending triangle instead.
An ascending triangle is, as the name implies, a bullish chart pattern, so we’re lookin’ mainly to go long on the pair if or when the pattern’s resistance area at 1.8860 is breached. And if a breakout does occur, then the pair will likely have enough steam for a 300-pip move.
However, there is always a slim chance that the pair would break to the downside instead, so y’all may wanna prepare for such a scenario as well. In the case of a downside breakout, though, the pair needs to clear 1.8560 and 1.8310 before the breakout is validated.
NZD/CAD has recently been trading sideways while tapering to a point recently. And in the process, a symmetrical triangle has emerged for us to play with. Awwwwww, g’yeah!
A symmetrical triangle pattern could potentially break in either direction, so we don’t really have any directional bias on the pair. And since the chart pattern is about 150 pips tall, then the resulting rally or selloff from a breakout could potentially last for the same amount.
With that said, an upside breakout needs to clear the 0.9550 minor psychological level on strong momentum. Otherwise, the upside breakout may end up being a fakeout. Know what I’m sayin? A downside breakout, meanwhile, needs to smash past 0.9390 in order to be validated. In any case, just make sure to practice proper risk management, aight?!
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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.