Talk about combining Fibs with support and resistance! NZD/JPY is showing a trifecta of inflection points right around the 90.00 major psychological level, broken support area, and 61.8% Fibonacci retracement level. Stochastic is heading north, indicating that price could still pull up to that area of interest before resuming its drop. If the resistance at 90.00 holds, NZD/JPY could make its way back down to its previous lows around the 84.00 major psychological level.
Here’s a retracement setup that looks ready to play out. GBP/JPY is already stalling at an area of interest visible on its 4-hour time frame, still deciding whether to head higher or to turn back down. The pair seems to be finding resistance at the broken support area near the 50% Fibonacci retracement level, but stochastic is hinting at a potential move higher. The 61.8% Fib might be the line in the sand for any rallies so make sure you set your stops beyond that point if you’re thinking of shorting this one!
If you’d rather trade the Loonie, then this forex correction play on CAD/JPY’s 4-hour time frame might be worth considering. The pair is just starting to retreat from its recent drop and seems to be closing in on the 38.2% Fibonacci retracement level. If this keeps gains in check, CAD/JPY could resume its downtrend and head back to the previous lows around 92.00. A higher retracement could last until the 61.8% Fib, which is right in line with a broken support level and the 100.00 major psychological mark.
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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.