Bounce or break? AUD/JPY is currently testing the top of the channel forming on its 1-hour time frame while stochastic is indicating overbought conditions. However, the oscillator hasn’t crossed down yet, which suggests that there could be buying pressure left. Better wait for reversal candlesticks if you’re planning to short and make sure you check out our lesson on Trading Breakouts if you’re thinking of going long.
One bottom, two bottoms… Why, that’s a classic reversal chart pattern right there! GBP/JPY seems ready to start an uptrend, as a double bottom has formed on its 1-hour time frame. The pair has yet to break above the formation’s neckline, but bear in mind that the potential rally could last a couple hundred pips, which is approximately the same height as the chart pattern.
Here’s one for the longer-term traders out there! On its daily time frame, CAD/JPY seems to have made a clean break below a significant support level around the 92.00 major psychological handle. Stochastic has already reached the oversold region though and looks ready to move higher, which means that a quick pullback might be in the cards before CAD/JPY resumes its selloff.
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.