Daily Forex Chart Art – July 29, 2015

NZD/JPY: 1-hour

NZD/JPY 1-hour Forex Chart

NZD/JPY 1-hour Forex Chart

Careful, Kiwi bears! NZD/JPY seems to be done with its recent dive, as the pair formed an inverse head and shoulders pattern on its 1-hour forex time frame. This suggests that a reversal is in order since the 100 SMA just crossed above the 200 SMA as well. However, stochastic is moving down from the overbought region, indicating that sellers might still take control and push the pair down from the 83.00 major psychological resistance. If that happens, a move towards the previous lows near the 81.00 handle could be seen. On the other hand, an upside break past the pattern’s neckline could yield as much as 300 pips in gains, which is roughly the same size as the chart formation.

AUD/JPY: 4-hour

AUD/JPY 4-hour Forex Chart

AUD/JPY 4-hour Forex Chart

Here’s another potential reversal play on a yen pair. Sellers seem to be tired from pushing AUD/JPY lower, as a double bottom pattern is starting to form on the pair’s 4-hour forex chart. Support at the 89.50 minor psychological level has been holding like a boss but the pair has yet to test the neckline around the 92.50 mark before completing the formation. Stochastic is still pointing up, which means there’s enough bullish momentum left for a move higher, but turning down from the overbought region could mean that sellers are ready to get back in the game. For now, the 100 SMA is still below the 200 SMA, suggesting that the downtrend could carry on so make sure you keep tabs on the near-term resistance at the short-term moving average.

USD/CAD: 4-hour

USD/CAD 4-hour Forex Chart

USD/CAD 4-hour Forex Chart

If you’d rather follow trends, then this longer-term retracement play on USD/CAD’s 4-hour forex chart is worth watching. Earlier this month, the pair surged past the key resistance around the 1.2700 to 1.2750 levels then zoomed all the way up to a high of 1.3103. From there, price showed signs of pulling back, possibly until the broken resistance area which lines up with the 38.2% Fibonacci retracement level. Stochastic is already indicating oversold conditions but hasn’t crossed up yet, which suggests that a bounce could take place sooner or later. A shallow correction might last only until the dynamic support at the 100 SMA, which is still treading above the 200 SMA and indicating that the climb could resume.

Forex Chart Settings:

Slow Stochastic: 14,3,3
100 SMA: Blue line
200 SMA: Red line

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.