Check out this descending channel forming on EUR/GBP’s 4-hour forex chart! The pair just got rejected after testing the channel resistance around the .7200 major psychological level and 200 SMA so it’s making its way back towards the bottom. However, stochastic is already indicating oversold conditions, which means that a bounce from the middle of the channel is possible. If that happens, price could climb back to the channel resistance somewhere near the .7100 to .7150 levels this time. If sellers continue to push the pair down, a test of support around .6800 to .6850 could take place. Better keep your eyes peeled for reversal candlesticks if you’re taking a countertrend setup, though!
Reversal alert! AUD/USD seems to be done from its recent selloff, as the pair formed a short-term reversal pattern on its 1-hour forex time frame. Price failed in its last two attempts to break below the .7400 major psychological mark then found resistance around .7500, creating a double bottom formation. The pair has yet to test the neckline before confirming the potential uptrend, but stochastic seems to be saying that this ain’t happening anytime soon. The oscillator is moving down, suggesting that sellers are in control of price action at the moment. If Aussie bears stay on top of their game, they could push for another test of the previous lows around .7400 or even a downside break.
Here’s another trend play that you might be interested in! USD/CHF has been trading inside an ascending channel on its 1-hour forex time frame, showing that an uptrend has been going on. The pair is currently stalling at the mid-channel area of interest, which is in line with the moving averages. Stochastic is moving up and reflecting an increase in buying pressure so the pair might be in for another test of the channel resistance around the .9600 major psychological mark. However, if sellers take over, a drop towards the channel support around .9400 could take place. If you’re looking for more signals, you could wait for a downward crossover from the moving averages to show that a selloff might occur.
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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.