Looks like the downtrend is still holding for AUD/USD! The pair recently made a test of the descending channel resistance before turning lower and making its way back towards the channel support. The 100 SMA is moving below the longer-term 200 SMA anyway, confirming that the path of least resistance is to the downside. If Aussie bears stay in control, price could reach the bottom of the channel around the .7250 minor psychological mark. However, the pair seems to be stalling around the mid-channel area of interest near the .7300 major psychological level and might be due for a bounce since stochastic is climbing out of the oversold region. If that happens, another test of the resistance near .7400 might take place.
Check out this symmetrical triangle pattern forming on EUR/JPY’s 1-hour forex chart! The pair is currently bouncing off the bottom of the formation around the 135.00 major psychological level and might be headed for the top near 136.50. Stochastic is still pointing up, indicating that further gains are possible, but the oscillator is already indicating overbought conditions so the rally might be limited. At the same time, the pair is also finding resistance around the 200 SMA, which has held as a dynamic inflection point in the past. In addition, the 100 SMA is below the 200 SMA, suggesting that a downside break might take place.
Aussie bears, watch out! AUD/JPY is approaching the bottom of its short-term range on the 1-hour time frame, which suggests that the recent selloff might come to a halt. Stochastic is near the oversold region as well so buyers might be ready to take over sooner or later. In that case, the pair could bounce off the support around 91.20 and head right back up to the top near 92.20. The 100 SMA is above the 200 SMA anyway, which suggests that the climb could resume in a bit, but these moving averages are looking prime for a downward crossover. If you’re going for a bounce, better wait for reversal candlesticks to form before buying. If you’re hoping to catch a breakdown, make sure you set your orders far enough to avoid getting faked out.
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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.