The chart pattern party ain’t over yet ‘coz I’ve got a triangle on NZD/USD and a channel on GBP/USD in today’s intraday charts update. Check ’em out!
NZD/USD has been trading sideways for some time now. Moreover, NZD/USD’s recent price action appears to be tapering into a point. And if connect the most recent peaks and trough, we can see that a fresh symmetrical triangle has formed on NZD/USD’s 1-hour chart.
As y’all should know by now, a symmetrical triangle means that the pair is as likely to break to the upside as the downside. We therefore don’t really have a strong directional bias on the pair. In fact, it would even be prudent if y’all prepare for an upside scenario as well as a downside scenario.
Having said that, a downside breakout needs to smash lower past 0.6850 in order to confirm the downside move. An upside breakout move, meanwhile, needs to take out 0.6990. However, there’s also an area of interest nearby at 0.7040. Y’all may therefore wanna keep a close eye on how the pair reacts to that price area as well.
If y’all can still recall, we were lookin’ for opportunities to go short back then since the pair was hesitating at the area of interest at 1.3420. Also, our technical indicators were favoring further moves to the downside at the time.
Well, check that out, dawg! That’s right! The area of interest at 1.3420 did hold as resistance and the pair moved lower for over 200 pips. And if you were able to ride that, then congratulations on bagging some pips. Aww, yeah!
Anyhow, the pair appears to be moving back up again after testing the channel’s support. And since the channel is still intact, today’s play is obviously to play the channel again.
The more conservative play is to wait for the pair to test the channel’s resistance, which should be at or just below 1.3370, and then start lookin’ for opportunities to go short.
However, the pair is also approaching the area of interest at 1.3320, which is just above the mid-channel area. The area of interest at 1.3320 is also just below the 100 SMA, so there’s a good chance that resistance may form there.
Just keep in mind, though, that going short at or around 1.3320 is an aggressive play and more risky. You should therefore only try it if you’re gangsta enough.
And as always, the chance for an upside channel breakout is always there. And a break higher past 1.3420 would be an early signal that bulls are taking over. The pair would still need to clear 1.3460 in order to confirm the break, though.
At any rate, just remember to always practice proper risk management, a’ight?