Check out this pullback situation taking place on EUR/NZD’s 4-hour forex chart! The pair is moving closer to testing the descending trend line connecting the highs of the price so far this year. Using the handy-dandy Fib tool shows that the 50% Fibonacci retracement level lines up with the falling resistance and is close to the 1.5800 major psychological level. A higher retracement could reach until the 1.5900 mark or the 61.8% Fib but, with stochastic already in the overbought zone, it looks like bears are eager to jump in!
Bounce or break? GBP/AUD has sold off pretty quickly in the past few days, as price is about to test the bottom of the rising channel on its 4-hour forex time frame. It appears that support at the 1.8000 major psychological level is holding like a boss and, with stochastic moving out of the oversold area, a bounce back to the mid-channel area of interest at 1.8200 might be in the cards. A stronger rally could even last until the top of the channel near the 1.8400 handle. Just make sure you set your stop below the channel support if you’re going long.
Fancy a countertrend trade? Check out this channel resistance setup on AUD/NZD! The pair has been moving in a rising channel on its 4-hour forex time frame since the beginning of the year and is currently testing the top of the channel at the 1.1000 major psychological mark. At the same time, stochastic is indicating overbought conditions, which means that Aussie bears could push price back down. In that case, move back to the middle of the channel or the 1.0850 area could take place. A stronger selloff might last until the channel support at 1.0650.
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.