I’m serving up a chart pattern + Kiwi double special in today’s intraday charts update, with a channel on NZD/USD and a triangle on NZD/JPY on the menu. Get ’em while they’re still fresh!
NZD/USD has been trading with an upward tilt lately. And if we connect the most recent peaks and troughs, we can see that the pair has been moving higher while trapped inside that there ascending channel.
And as I always say, one of the more conservative ways to play an ascending channel is to look for opportunities to go short when the pair is at or close to the channel’s support area.
Well, as luck would have it, the pair is currently testing the channel’s support area. And it just so happens that the channel’s support area sits right smack on the 0.6800 major psychological level.
Y’all may therefore wanna start looking for an opportunity to go long on the pair. And all the more so, given that stochastic is already moving back up again after visiting the oversold area.
But as usual, do be reminded that the risk for a downside channel breakout is always so there. So, just know that a break lower past 0.6750 would validate a breakout. And that happens, then y’all may wanna think about bailing yo longs, if you still have ’em. You may even wanna switch to a bearish bias at that point.
If you’re a breakout chartist, then you may like that there setup on NZD/JPY.
As y’all can see, the pair’s most recent price action appears to be tapering into a point. And in the process, a fresh symmetrical triangle pattern has emerged.
And as y’all probably know by know, a symmetrical triangle pattern can break either to the topside or the downside. It would therefore be a good idea not to have a directional bias and prepare for both topside and downside breakout scenarios.
Do note, however, that an upside breakout needs to clear both 77.70 before y’all can chillax. Otherwise, the breakout may end up being a nasty fakeout. A downside breakout, meanwhile, needs to smash lower past 76.50 and 76.30, ideally on strong bearish momentum.
In either case, the resulting breakout move will likely have enough momentum for a 120-pip move, based on the height of the forex chart pattern.
Anyhow, y’all just make sure to practice proper risk management as always, a’ight? Peace, out!