Bounce or break? AUD/USD is sitting right on the descending trend line connecting its recent highs on the 1-hour forex chart, still deciding whether to push for more gains or to head back south. Stochastic is moving up from the oversold area, hinting that an upside break past the .7800 major psychological resistance and trend line might be possible. But if the resistance area holds, the pair could move towards its previous lows near the .7600 major psychological support or perhaps make new lows. Better set your stops past the .7800 mark if you’re thinking of shorting!
Heads up, pound bears! GBP/USD is testing a key resistance area at the top of its range on its 1-hour forex chart and may be ready to drop soon. If that happens, the pair could make its way down to the bottom of the range just above the 1.5000 major psychological support level. Stochastic is almost in the oversold area already, which suggests that selling pressure might weaken soon and that another test of resistance might be in the cards. Don’t forget that an upside break from the range can still take place if pound bulls decide to charge.
If you think the trend is your friend, you should have a look at this potential channel bounce on EUR/NZD’s 1-hour forex time frame. As you can see, price has been moving inside a rising channel as it formed higher lows and higher highs. For now, EUR/NZD looks ready to test the bottom of the range and may be due for a bounce since stochastic is already indicating oversold conditions. In this case, the pair might climb back to the top of the channel near the 1.5850-1.5900 levels.
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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.