Who’s up for a countertrend trade? Here’s a potential bounce off the descending channel support on USD/JPY’s 1-hour forex chart. The pair might climb back to the top of the falling range around the 119.00 major psychological resistance, as stochastic is moving out of the oversold area and indicating a pickup in buying pressure. A downside break could still be possible though and this could be a sign that the downtrend would get stronger. Make sure you review our lesson on How to Trade Breakouts if you’re thinking of taking that route!
AUD/JPY formed lower highs recently and found support at the 96.00 major psychological level, creating a descending triangle pattern on its 4-hour forex time frame. The consolidation is getting tighter and tighter, suggesting that a breakout is bound to take place sooner or later. A break in either direction could last by as much as 600 pips, which is roughly the same height as the chart pattern. Stochastic appears to be climbing out of the oversold region, which means that Aussie bulls have better control of price action.
Last but not least is this break-and-retest situation goin’ on in EUR/CAD’s 1-hour forex chart. The pair previously broke past the falling trend line on the same time frame and zoomed up to the 1.4200 handle before retreating. Using the Fib tool on the breakout move reveals that the 61.8% Fibonacci retracement level lines up with the broken trend line and the 1.4000 major psychological level, which might act as support. Euro bulls seem to be gaining ground already as the pair made a small bounce off the 50% Fib and could be headed back towards the previous highs.
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.