Daily Forex Chart Art – Oct. 3, 2014

GBP/CAD: Daily

GBP/CAD Daily Forex Chart

GBP/CAD Daily Forex Chart

After breaking below strong support at 1.8200 and dropping all the way down to 1.7550, the pair has bounced back to retest the broken support (which now happens to be the 61% Fibonacci retracement level). So far, this area has held as resistance and with the stochastic showing potentially overbought conditions, sellers just might see this as an opportunity to re-take control. If you’re bearish on the pair, this price action might be the confirmation you’re looking for to dip a toe back into the long-term trend lower.

CAD/JPY: Daily

CAD/JPY Daily Forex Chart

CAD/JPY Daily Forex Chart

CAD/JPY is bouncing off of a major resistance level that goes all the way back to 2013.  If the range bound behavior continues, the pair could be on its way back to the bottom of the range, which is a desirable risk-to-reward ratio for any forex trader out there.  For those who can wait, the stochastic indicator is showing potentially oversold conditions at the moment, which means a pullback to the 98.00 to 99.00 area is a possibility, thus creating a better risk-to-reward entry area to target the bottom of the long-term range around 91.00.

AUD/NZD: Daily

AUD/NZD Daily Forex Chart

AUD/NZD Daily Forex Chart

We’re seeing a support break-and-retest scenario forming in AUD/NZD, similar to GBP/CAD above.  What makes this setup different is the divergence formed between price action and the stochastic indicator.  Has the bounce higher run out of steam? It could be that the market has run out of buyers, setting up a nice opportunity for forex players to get back in another long-term downtrend (with positive carry) and target the major support area around 1.0650.

Chart Settings

Slow Stochastic: 14,3,3
100 SMA: Blue line
200 SMA: Red line

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.