Reversal alert! EUR/JPY seems to be tired of its long-term downtrend, as the pair seems to be creating a double bottom formation on its daily forex chart. Price is still a few hundred pips away from testing the neckline resistance before confirming the potential uptrend, but stochastic is already moving up and indicating a pickup in bullish momentum. Take note that the chart pattern is roughly 500 pips tall, which suggests that the resulting breakout could be of the same size. Better keep close tabs on this one!
Will USD/JPY resume its climb? On its daily forex time frame, it looks like the pair is finding strong support at the ascending triangle bottom. If the 119.00 major psychological level keeps further losses in check, price could bounce back up to the top of the triangle near the 121.00 major psychological mark. Stochastic is indicating oversold conditions anyway, confirming that a bounce is likely. If a breakdown takes place though, the pair could fall by as much as 500 pips, which is approximately the same height as the triangle.
If you’re bullish on the Aussie, you definitely gotta take a look at this potential reversal on AUD/JPY’s 4-hour forex chart. The pair failed in its last two attempts to break below the 91.00 handle, forming a double bottom and moving up to test the neckline resistance. Price already gapped up over the weekend, hinting that buyers are off to a running start and ready to push the pair much higher. If an upside breakout takes place, AUD/JPY could climb by around 250 pips since the chart formation is of the same size.
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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.