Will USD/JPY take it easy from here? The pair has been climbing for the past few weeks, but it looks like it’s hitting a ceiling around the 108.00 major psychological level. At the same time, stochastic is indicating overbought forex conditions, which means that buyers are already exhausted. If the 61.8% Fib and former support area hold as resistance, USD/JPY could resume its slide and possibly make its way back down to the previous lows at the 105.50 minor psychological support. A rally past 108.00, on the other hand, could lead to another test of the 110.00 handle.
Decision-making time for Cable! The forex pair has sold off so far this week but the mid-channel area of interest appears to be holding as support for the time being. After all, this lines up with the 1.6000 major psychological level, where some sellers probably took profits and a few buyers are looking to jump in. A rally could take GBP/USD back to the top of the channel, which is around the 1.6100 mark, while a drop could lead to a test of channel support at 1.5800. Stochastic seems to be favoring a climb, as the oscillator is moving higher.
Now here’s another forex chart pattern on USD/CAD’s 1-hour time frame! After forming a double top recently, USD/CAD is now creating a descending triangle formation, as traders seem to be pushing the pair lower. A downside break below the triangle support and 1.1200 major psychological level could confirm a potential selloff, which might last by at least 150 pips. On the other hand, an upside break above the triangle resistance around 1.1250 could also lead to a 150-pip move. Stochastic appears to be headed south, which suggests that the path of least resistance is to the downside.
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.