Fly, Kiwi, fly! The rising channel on NZD/JPY’s 1-hour forex time frame is still very much intact, as the pair is making its way up to the top of the range. Stochastic is starting to head lower though, indicating that buying momentum could start to weaken. NZD/JPY could still make it up to the channel resistance around the 88.00 major psychological level before heading back down to the bottom or at least until the middle of the range near 87.50. If you’re thinking of shorting this one, make sure you set your stop above the channel resistance!
Check out this neat little breakdown on EUR/NZD’s 4-hour forex chart. The pair had been bouncing up and down inside a 140-pip range before it made a break below support around 1.5720 a few days back. Price even broke below the 1.5700 major psychological level, reflecting how sellers are taking control. This could be a sign that EUR/NZD could be in for more declines, possibly gearing up to head further south by as much as 140 pips as well. No signs of a pullback are materializing for now, but stochastic is already indicating oversold conditions so a small bounce back to the broken support area could take place.
Is this breakdown legit or what? NZD/USD appears to have made a clean break of the double top neckline on its daily forex chart, suggesting that a longer-term downtrend might take place. However, it looks like Kiwi bulls aren’t giving in too easily, as stochastic is moving higher and price might still make a retest of the broken neckline. Take note though that the chart pattern is roughly 400 pips in height, which indicates that resulting selloff could be of the same size. If more sellers jump in, NZD/USD could make its way back down to the next long-term support zone at the .8000 major psychological mark.
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.