Uh oh, is the Aussie about to go down under? It looks like a head and shoulders pattern is forming on AUD/USD’s 4-hour time frame, suggesting that a potential reversal from the uptrend could be in the works. It seems that the right shoulder hasn’t completely formed yet though, as stochastic is still pointing upwards. Note that the formation is roughly 150 pips in height, which means that the pending breakdown could reach until the 1.0300 area.
Now here’s another pattern that’s still about to form. CAD/JPY has been making higher highs and higher lows, gradually creating a rising channel on its 4-hour chart. The pair just hit resistance at the top of the channel and seems poised to head back down. If it does, it could bounce from the bottom of the channel, which is right around the 80.00 major psychological level. Make sure to wait for stochastic to reach the oversold zone and cross upwards before going long though!
Last but certainly not least, here’s a shorter-term setup for all the day traders out there! GBP/USD has been moving sideways lately, forming what appears to be a 50-pip range on its 1-hour time frame. The pair has found support just above the 1.6200 major psychological handle and resistance close to 1.6270. After a steep drop, GBP/USD still seems to be finding support at the bottom of the range, but stay on your toes for a potential breakdown below 1.6200 if it gives way!
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.