Reversal alert! EUR/CAD just broke above the neckline of its inverse head and shoulders chart pattern on the daily forex chart, revealing its plans to head north. The reversal formation is approximately 700 pips in height, which means that the resulting rally could be of the same size. This means that the pair could climb up to the 1.4500 major psychological level, which lines up with the next visible resistance area on the same time frame. Stochastic is almost in the overbought area so euro bulls might need to take a break sooner or later, possibly leading to a pullback to the broken neckline resistance.
Don’t look now but EUR/AUD just broke above the top of its 400-pip range on the 4-hour forex chart! This means that the pair could be in for more gains and could probably climb the same height as its previous range. Stochastic is already indicating overbought conditions, which means that the pair could still retreat to the broken range resistance around the 1.4350 minor psychological level before resuming its climb. However, if euro bears take control of price action, they could push EUR/AUD back inside its range and possibly until the bottom at the 1.3950 minor psychological mark.
If you think the euro’s rallies are too good to last, then you might like this long-term range setup on EUR/GBP’s daily forex chart. The pair is closing in on the top of the range around the .7400 major psychological resistance, which has kept gains in check for the past three months. At the same time, stochastic is nearing the overbought area, which means that buyers could pause for a while and let sellers take over. If that happens, price could turn from the top of the range and head back to the bottom, which is near the .7100 major psychological support level. Make sure you set those stops right in case a breakout occurs!
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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.