Is it time for the euro bears to shine? A double top pattern just formed on EUR/JPY’s 4-hour forex chart, suggesting that the pair is tired from its recent climb. A break below the formation’s neckline around the 138.00 major psychological level could confirm that a selloff would take place. Note that the chart pattern is approximately 300 pips in height, which means that the resulting downtrend could last by the same number of pips. However, stochastic is starting to move out of the oversold region, indicating that buyers could still come out to play and push the pair up to its previous highs. On top of that, the 100 SMA is above the 200 SMA, indicating that the uptrend might resume.
Check out this descending triangle pattern forming on USD/CHF’s 4-hour forex chart! Price has been forming lower highs and finding support at the .9150 minor psychological level. At the moment, the pair is testing the triangle resistance around .9340 and the moving averages while stochastic is indicating overbought conditions. If the resistance holds, USD/CHF could move back to the triangle support and possibly go for another bounce. A breakout is bound to happen sooner or later, though, and the resulting rally or selloff might last by around 450 pips or the same height as the triangle chart formation.
If you like trading inflection points then you gotta see this simple support-turned-resistance play on USD/JPY’s 1-hour forex time frame. The pair recently broke below support at the 124.00 major psychological level before dipping to a low of 122.50. From there, price pulled back up to the 124.00 mark, which is now holding as resistance. Another test of the area of interest is taking place right now and, if it still holds, the pair could move back to its previous lows. The moving averages are starting to make an upward crossover and stochastic is nearing the oversold region, hinting that an upside break might take place and take the pair up to the next resistance at 125.50.
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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.