Let’s start off with this recent forex breakout on GBP/CAD. Well, if you missed the actual upside break past the 2.0300 major psychological resistance, there might still be a chance to catch the rally on a pullback. The pair is currently retreating after coming close to the 2.0600 major psychological mark, and using the handy-dandy Fib tool on the latest swing low and high shows that the former resistance area is somewhere between the 61.8% and 50% retracement levels. In addition. the 100 and 200 SMAs are close to the area of interest, suggesting that it could hold as strong support. Stochastic is already moving up, which means that pound bulls are pretty excited to start charging again.
Looking for a reversal? You might wanna keep close tabs on this potential double top formation on GBP/JPY’s 1-hour forex time frame. The pair failed in its last two attempts to break past the 195.00 major psychological resistance and might be on its way to test the neckline at the 191.00 major psychological mark. A break below this level could confirm that a downtrend is in order, and price could fall by around 400 pips or the same height as the formation. Take note, however, that the 100 SMA is above the 200 SMA while stochastic is starting to climb out of the oversold region, indicating that buyers could stay in control of price action. This means that another test of the resistance at 195.00 is possible!
Which way will EUR/GBP go? The pair is stuck in the middle of a falling wedge pattern on its 4-hour forex time frame, still deciding whether to make another test of resistance or to head towards the bottom. Stochastic is on the move up, suggesting that a climb might take place, but the oscillator seems to be aiming for the oversold region again. Meanwhile, the 100 SMA is below the 200 SMA, hinting that further losses are more likely. If so, EUR/GBP could aim for the previous lows around the .6900 major psychological level or much lower. If you’re bullish on this pair, you could wait for an actual test of support around .6850 to .6900 and for reversal candlesticks to form before going long.
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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.