One top, two tops… and boom! Breakdown! EUR/AUD’s double top reversal chart pattern seems to be playing out already, as the pair already broke below the neckline around the 1.4450 minor psychological level. The formation is roughly 500 pips in height so we could be lookin’ at a 500-pip selloff right here! Stochastic is still pointing down, which means that euro bears are all pumped up and ready to push the pair lower, but watch out for pullbacks once the oscillator reaches the oversold area.
Here’s another reversal pattern that’s coming into play. USD/CHF could be headed back north now that a double bottom formed on its 4-hour time frame and the pair already breached the neckline. At the same time, stochastic is headed higher, suggesting that dollar bulls are a-chargin’! The pattern is around 200 pips tall so if you’re planning to catch this rally, you might want to set a 200-pip target.
Last but not least, here’s a setup that’s just gettin’ ripe for the picking! AUD/USD’s sharp selloff could be coming to an end since the pair made a double bottom formation on its 4-hour time frame. Price hasn’t quite broken above the neckline around .9250 but it seems headed for that resistance area, as stochastic is still moving higher. Make sure you read our lesson on Trading Breakouts if you plan to set buy stops above the neckline!
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.