Fibonacci lovers, unite! EUR/GBP seems to be in the middle of a huge retracement, falling as low as .8550 and then bouncing back up to the test the resistance at the 50% Fib level and the .8700 major psychological level. With the Stochastic just hitting the overbought territory, will we see the pair drop down again? If you’re bearish on the pair, look for Japanese candlestick formations to confirm your downside bias before going short!
Be careful bulls – NZD/USD appears to have formed a rising wedge! A rising wedge is usually considered bearish as it hints at a downside break. Watch the rising trend line support folks as we could see the pair fall to its former low at .8120 if we see a break!
For my last chart, let’s take a look at the bearish pennant that has formed in the AUD/JPY 4-hour chart. The bearish pennant is like the rising wedge. It is a continuation pattern indicating that the bears may soon take control again. In this case, look for a break of major support at 79.00 before hitting the sell trigger!
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.
Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals. Check him out, playas!