Yo! Let’s kickstart this week’s intraday charts update with a couple of channels on NZD/CAD and CAD/JPY. Hmm. I guess that means I’m serving up a Loonie + channel double special today.
NZD/CAD’s price action has been tilting to the downside lately. And if we connect the most recent peaks and troughs, we can see that a descending channel pattern has formed on the pair’s 1-hour chart.
And presently, the pair is currently making its way higher, likely towards the channel’s resistance area, which should be just above the area of interest at 0.8930.
Stochastic is already signaling overbought conditions and all that, however. There’s therefore a chance that the pair won’t reach the channel’s resistance and that the pair will use 0.8930 as a diving board instead.
As always, there’s a risk for an upside channel breakout, but that seems unlikely at the moment.
But just in case the pair does break to the topside, then a move past 0.8960 would be the earliest sign that them bulls are taking control. Although the pair also needs to clear 0.9000 major psychological level before the breakout is actually confirmed.
As y’all can see, CAD/JPY has been trending higher for a while now. And as y’all can also see, the pair is pulling back after testing the channel’s resistance area.
Y’all therefore better get ready to start lookin’ for opportunities to go long on the pair.
As to where the pair will likely pull back to, the 90.50 minor psychological level seems to be the key price area to watch since that’s where the channel’s support area is currently at. Moreover, if we apply our handy Fibonacci tool, we can see that 90.50 is just below the 50% retracement level.
However, the pair already appears to be hesitating at 90.80, which happens to sit right smack on the 38.2% retracement level. There’s therefore a chance that the pair will continue moving higher without pulling back further. And all the more so, given that stochastic is already indicating oversold conditions and all that.
In any case, just make sure to practice proper risk management as always, a’ight?