Heads up, pound bears! GBP/USD is approaching the bottom of the range on its 1-hour time frame and a quick bounce might be in the cards. As you can see from the forex chart above, price has been moving back and forth between resistance at the 1.6185 level and support around the 1.5950 minor psychological mark. Stochastic is indicating oversold conditions, which means that sellers are already feeling exhausted and may let the buyers take over price action soon. If that happens, GBP/USD might bounce back to the top of the range. If you’re planning to short on a breakdown, make sure you review our lesson on Trading Breakouts first!
Will USD/CAD stay on its uptrend? The pair is testing the rising trend line connecting the latest lows on its 4-hour forex chart and may be due for a bounce, especially since stochastic is already moving out of the oversold area. Another rally could take USD/CAD back to its previous highs near the 1.1400 major psychological level or at least until the area of interest around 1.1300. On the other hand, a strong break below the trend line support could mean that a longer-term reversal is about to happen. In that case, USD/CAD could tumble until the next support zone at the 1.1000 handle.
Reversal alert! USD/CHF might be able to recover from the recent selloff, as the pair just formed a double bottom forex chart pattern on its 1-hour time frame. At the moment, price is still testing the neckline of the formation while stochastic is already in the overbought area, suggesting that a bit of hesitation might be seen before the pair attempts to break higher. If an upside breakout takes place, USD/CHF might climb by as much as 150 pips, which is the same height as the chart pattern, or at least until the previous highs at the .9600 major 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.