After getting denied on its latest attempt to break above the descending triangle resistance on its 4-hour forex time frame, USD/JPY is heading back to the bottom of the formation, possibly to test the support. Stochastic has already indicated a return of buying pressure while price bounced off the 101.50 minor psychological level. Further gains could be limited to the top of the triangle near the 102.00 handle while a selloff could last until the 101.20-101.30 support zone. Make sure you review our lesson on trading breakouts if you plan on waiting for one!
Is the retest over yet? AUD/USD has previously broken below a rising trend line on its 1-hour forex chart and pulled up for a retracement. Price appears to be finding resistance at the 200 SMA, which lines up with the 50% Fib level and the .9400 major psychological mark. If that holds, AUD/USD resume its drop to the previous lows just above the .9300 major psychological level. A higher correction could take price up to the 61.8% Fib, which is closer to the broken trend line and the .9450 minor psychological resistance, especially since stochastic is still making its way up to the overbought zone.
Where to, EUR/JPY? The pair is stalling at the mid-channel area of interest around 138.75, which lines up with a former support zone. Stochastic is moving down from the overbought area, suggesting that euro bears are in control of forex price action at the moment and that another test of the channel support might take place. Should euro bulls come charging anytime soon, EUR/JPY might make a move back to the top of the rising channel near the 139.50 minor psychological resistance.
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.