Be careful out there, pound bulls! GBP/USD is currently finding resistance at the top of the rising trend channel on its daily forex chart and might head lower sooner or later. Stochastic is indicating overbought conditions, which means that buyers could use a break from the recent strong rallies. If price fails to break past the channel resistance around the 1.7200 major psychological handle, a drop to the mid-channel area of interest near 1.7000 or until the bottom of the channel at 1.6850 could be in the cards.
EUR/JPY appears to be forming a triangle chart pattern on its daily forex time frame, with the pair bouncing off the bottom of the formation. Take note though that stochastic is starting to move down from the overbought area, which suggests that a selloff might take place. If support at the 138.00 handle continues to hold, price could bounce back up to the top of the triangle around the 140.00 levels. On the other hand, a strong downside break could mean that a longer-term downtrend might take place.
Is that a double bottom chart formation on USD/CAD’s 1-hour forex chart? Why, that might be a sign that a reversal will take place! Price has yet to break past the neckline of the formation around the 1.0675 level before confirming a potential uptrend that might last by roughly a hundred pips, which is the same height as the double bottom pattern. Stochastic has reached the overbought zone though, which means that price might dip again before making an attempt to break 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.