Be careful, euro bears! EUR/USD just broke above the neckline of the double bottom forex chart pattern on its 1-hour time frame, suggesting that the downtrend is already over. Price could keep climbing by roughly 200 pips, which is the same height as the chart formation. Stochastic is already indicating overbought conditions but hasn’t crossed lower yet so there may still be enough buying pressure left for a move possibly until the 1.2650 area. Do watch out for the nearby resistance around the 1.2550 minor psychological level if you’re going long!
Bounce or break? EUR/GBP is currently testing the top of the ascending triangle pattern on its 1-hour forex chart, still deciding whether to break to the upside or make a move back to the triangle support. Stochastic seems to be hinting at a selloff, as the indicator has already reached the overbought zone and might turn down soon. In case price does make a breakout, the resulting move could last by at least a hundred pips, which is roughly the height of the triangle formation. Make sure you review our lesson on How to Trade Triangles if you’re thinking of taking this setup.
After testing resistance around the 1.6200 major psychological mark, EUR/NZD dropped like a rock to an area of interest visible on its 1-hour forex chart. The pair seems to be finding a floor at the 1.5950 minor psychological level, which lines up with the 61.8% Fibonacci retracement level on the latest swing low and high. Stochastic appears to be turning higher, which could draw buyers in and lead to a bounce back to the previous highs. Given that strong downside momentum though, EUR/NZD might still resume the drop and test the next support zone at 1.5500.
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.