Yo! Let’s kickstart this week’s intraday charts update with a couple of chart patterns on NZD/USD and NZD/JPY! Check ’em out!
NZD/USD has been trading sideways for a while now. And if connect the most recent peaks and troughs, we can see that the pair has been tapering into a point, forming that there symmetrical triangle in the process.
A symmetrical triangle means that bulls and bears are fighting it out. This means that the pair could break either to the upside or the downside. As such, we don’t really have a directional bias on the pair and it may even be prudent to prepare for both an upside and downside scenarios.
And if a breakout does occur, then the resulting rally or selloff will likely have enough momentum for a 190-pip move, based on the height of the forex chart pattern.
Just make sure to keep an eye on how the pair reacts to 0.6970 since the pair needs to clear that in order to validate an upside breakout. A downside breakout, meanwhile, needs to smash lower past 0.6780.
Okay, gotta keep it real with y’all, so I’ll just tell y’all straight up that this descending channel on NZD/JPY’s 1-hour chart ain’t exactly fresh.
You see, we first identified that channel way back on November 20. The pair was milling about at the channel’s support area back then. And we were expecting it to pull back to 77.40. Well, the pair took its sweet time, but that’s how price action on the pair played out.
And since the channel is still intact, and since the pair is at the channel’s resistance area, why not play this setup now by lookin’ for opportunities to go short? After all, stochastic is already pointing back down after milling about at the overbought area for a while.
Do note, however, that them moving averages have recently crossed over into uptrend mode. There’s therefore a chance that the pair may stage an upside channel breakout, and a break past 78.30 would be an early sign that bulls are in control, so y’all may wanna bail yo shorts then or even switch bias. The pair needs to clear 79.00 to confirm the breakout, though.
In any case, just make sure to practice proper risk management as always, a’ight?