Time for a pullback on Cable? This pair has been diving for the past few weeks and it looks like it needs to come up for some air. Applying the Fib tool on the latest swing high and low shows that the 50% retracement level lines up with the 1.5500 major psychological level and a former support area, which might now hold as resistance. Note that the 100 SMA just crossed below the longer-term 200 SMA, confirming that the selloff is likely to carry on, while stochastic reached the overbought zone. If pound bears are eager to let the downtrend resume, a shallow forex correction might be in the cards, possibly just until the 38.2% Fib.
Range traders, unite! EUR/NZD is currently testing the top of the range visible on its 1-hour forex chart and might make its way back to the bottom. Stochastic is already moving down from the overbought area, indicating that sellers are in control of price action at the moment. However, the 100 SMA is safely above the 200 SMA, suggesting that an upside breakout might still be possible. If you think the range will hold and you’re planning on shorting at the current levels. just make sure you set your stop past the resistance at the 1.7860 mark or the previous highs. But if you think that further gains are likely, better wait for a long green candle to close past the resistance to avoid getting faked out!
Here’s another potential range play on a euro pair! EUR/AUD has been forming higher lows and lower highs, creating a symmetrical triangle pattern on its 1-hour forex chart. Price is currently testing the top of the triangle around the 1.6100 major psychological resistance and might be due for a move back to the support near the 1.5850 minor psychological mark. Stochastic is moving down from the overbought region, which means that buyers are taking a break and allowing sellers to take the upper hand. However, the 100 SMA is above the 200 SMA, which means that the path of least resistance is to the upside and that a triangle breakout might be possible.
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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.