Confluence, baby! USD/JPY seems to be hitting a ceiling on its 1-hour forex time frame, as several resistance levels lined up around the 102.00 area. That’s a former low, 100 SMA, 50% Fibonacci retracement level, and a major psychological handle. Stochastic is moving down, indicating that there’s enough selling pressure to push the pair back to its previous lows near the 101.50 minor psychological level. A break above the 61.8% Fib and the 200 SMA, on the other hand, would mean that more rallies are in the cards.
In the mood for a breakout? Here’s one that just took place on NZD/JPY’s 4-hour forex chart! The pair seems to have breached the resistance on the falling channel, indicating that the downtrend is over and that a reversal is about to start. Rallies could last until the 90.00 major psychological level, but be careful since stochastic is already in the oversold area. A quick pullback might happen before the climb resumes but make sure you’re ready to exit in case this is a fake out, too.
If you’d rather stick to the ranges, then you might like this AUD/JPY long-term setup better. On its daily forex chart, the pair appears to be finding resistance at the top of the rising channel, which means that it could be on its way south. At the same time, stochastic is in the overbought zone, which means that buyers are already tired. A selloff could last until the bottom of the channel near the 90.00 major psychological level or at least until the middle at 93.00.
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.