Trend traders, unite! EUR/CHF has been moving inside a descending channel on its 1-hour forex chart and just came off a test of resistance. Price could make its way back to the bottom of the range around the 1.0400 major psychological mark since stochastic is also heading lower. However, the pair seems to be stalling around the mid-channel area of interest at the 1.0450 minor psychological mark, which lines up with the moving averages. If a bounce happens right here, another test of the channel resistance near the 1.0500 major psychological level might take place. Note that the short-term 100 SMA just crossed below the longer-term 200 SMA, suggesting that the downtrend could carry on.
Missed the triangle breakout move on AUD/USD? Don’t fret! The pair seems to be retreating from its recent rally, possibly pulling back to the broken resistance area. Using the Fib tool on the latest swing low and high shows that the 50% Fibonacci retracement level lines up with the top of the triangle around the .7750 minor psychological level and the moving averages. At the same time, stochastic is nearing the oversold area, hinting that the correction might be over soon. If any of the Fib levels hold as support, AUD/USD could climb back to the previous highs at .7850 and beyond.
Careful, euro bulls! A reversal chart pattern is starting to form on EUR/AUD’s 1-hour forex chart, indicating that the pair is tired from its recent rallies. A double top formation can be seen, as price failed in its last two attempts to break past the 1.4750 minor psychological resistance. The pair has yet to test the neckline of the formation around the 1.4450 level, with a breakdown likely to confirm that a downtrend is underway. If that happens, the pair could fall by around 300 pips, which is the same height as the chart formation. Stochastic is pointing up for now so buyers are still in control, but the moving averages are showing a downward crossover and suggesting a potential drop.
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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.