Let’s begin this week’s intraday charts update with a couple of short-term channel setups on EUR/USD and EUR/NZD that y’all will probably like.
The more conservative way to play an ascending channel is to look for opportunities to long when the pair is at or close to the channel’s support area.
And since the pair is currently just above the channel’s support, then that means that y’all better start lookin’ for a chance to go long.
And all the more so, given that the pair happens to be testing the area of interest at 1.1170.
In addition, stochastic is already signaling oversold conditions and all that.
Do note that them moving averages are in downtrend mode already, though. As such, there’s a slim chance that the pair may stage a downside channel breakout.
The pair needs to smash past 1.1110 before a downside breakout is confirmed, however. But if the pair does break past 1.1110 on strong bearish momentum, then y’all may wanna think about bailing yo longs or even switching to a bearish bias.
Also, do note that resistance at 1.1260 appears to be rather strong. So if 1.1170 does hold as support, then y’all may wanna keep a close eye on the pair until it clears 1.1260. And as usual, just make sure to practice proper risk management, a’ight?
If you’re more of a breakout chartist, then you may like that there descending channel on EUR/NZD.
Channel patterns are generally considered as trend continuation forex chart patterns. However, price action on EUR/NZD indicates that there’s currently a higher-than-average chance for an upside breakout.
After all, the pair has recently been hugging the channel’s resistance area while failing to test the channel’s support area. This implies that them bulls currently have a slight edge over them bears.
Moreover, the pair has just reached the 1.5350 minor psychological level, which is a very significant area of interest, even on the higher time frames. There’s therefore a good chance that support may form here and allow them bulls to counter-attack.
An upside breakout needs to clear both 1.5490 and 1.5650, though, so them bulls got a lot of work to do if they want to cause a trend change. Also, our technical indicators don’t fully support an upside breakout just yet since the 100 SMA appears to be acting as dynamic resistance while stochastic is already signaling overbought conditions. Y’all may therefore wanna prepare for the usual trend continuation scenario as well.