Let’s start off with a simple break-and-retest forex setup on GBP/AUD’s 1-hour forex time frame. The pair has recently surged past an area of interest around the 1.9000 major psychological mark and zoomed up to the 1.9150 area. From there, price pulled back to the broken resistance zone, which lines up with the 50% Fibonacci retracement level. A bounce could take place soon, although stochastic is still on middle ground and barely providing clues on the pair’s direction. If pound bulls charge, they could take price back up to the previous highs and beyond.
Now here’s a potential reversal pattern you might be interested in! EUR/JPY is creating a head and shoulders formation on its 1-hour forex chart, hinting that a short-term selloff may be in the cards. Price has yet to break below the diagonal neckline right around the 146.50 minor psychological level before confirming the reversal. That might not happen anytime soon though, as stochastic is making its way out of the oversold area and indicating a pickup in buying momentum. If price breaks below the neckline sooner or later, EUR/JPY could be in for a 300-pip drop!
Think the trend is your friend? Better take a look at this falling trend line setup on AUD/CAD then! Price has been forming lower lows since last month, just recently dipping to the .9500 major psychological support before making another pullback attempt. The pair could retrace until the falling trend line, which lines up with the 61.8% Fibonacci retracement level on the latest swing high and low on the 4-hour forex chart. Stochastic is still heading north, which means that buyers have enough energy to push AUD/CAD a bit higher for now. Do watch out for potential reversal candlesticks around the 50% Fib as well!
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.