Let’s start off with a simple trend play on EUR/AUD’s 1-hour forex chart. The pair has been trading below a descending trend line in the past few days, showing that the downtrend is still intact. After dipping below the 1.4000 major psychological support, price looks ready to make a pullback to the trend line and possibly test resistance near the 1.4200 major psychological level. Stochastic is almost in the overbought zone and ready to turn lower, which means that euro bears could take over and push EUR/AUD back to the 1.4000 mark or lower.
Now here’s my favorite break-and-retest situation goin’ on in Guppy’s 1-hour forex time frame! The pair recently broke below the 184.00 major psychological support level then made a dive to the 181.50 minor psychological handle. From there, price pulled back up to the 61.8% Fibonacci retracement level, which lines up with the broken support. Stochastic is hinting that this area might hold as resistance, as the oscillator has been indicating overbought conditions for quite some time and looks ready to head south. In that case, GBP/JPY could head back to its previous lows or create new ones.
If you’re into picking market tops and bottoms, you might be interested to see Cable’s daily forex chart right here. After bouncing off the 1.5000 mark late last year, the pair is once again gearing up to test this major support level. Stochastic has already reached the oversold mark and looks ready to turn higher, which means that another bounce might take place soon and take GBP/USD up to the nearby resistance around 1.5500. On the other hand, if a downside break takes place, the pair might be in for a longer-term drop. Better make sure that candlestick patterns and technical indicators confirm the breakout before hopping in!
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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.