Let’s warm up with this neat forex range setup on AUD/NZD’s 4-hour time frame. The pair has been pacing back and forth between support at the 1.0960 area and resistance near the 1.1300 major psychological mark. Price just came off a test of resistance and might be ready to make its way back to the bottom of the range since stochastic is indicating a pickup in selling pressure. Aside from that, the 100 SMA is below the longer-term 200 SMA, confirming that a selloff is likely. On its way down, the pair might still encounter a bit of support at the middle of the range around the 1.1150 minor psychological handle and the moving averages. Watch out for another potential test of resistance if that happens!
Let’s pick up the pace with this potential reversal play looming on NZD/USD’s 1-hour forex chart. The pair failed in its last two attempts to break below the .6250 minor psychological support, creating a double bottom formation with a neckline just above the .6400 handle. Price is still making its way up to test the neckline but it could encounter some road bumps, as the 100 SMA is below the 200 SMA while stochastic is heading down from the overbought region. If Kiwi bulls are able to gain traction, they could have enough energy to push for an upside break from the neckline and spur a 150-pip rally, which is roughly the same height as the double bottom pattern. But if Kiwi bears refuse to give way, another test of the .6250 lows might be in the cards.
Time to stretch out those Fib muscles to see if this area of interest on AUD/CAD’s 4-hour time frame might hold as resistance. The pair is currently testing the line in the sand for this correction wave, as price is hovering around the 61.8% Fib on the latest swing high and low. This coincides with the 200 SMA and the .9500 major psychological level, which might be enough to keep further gains in check. Stochastic is already moving down from the overbought zone, hinting that the selloff could resume and possibly take the pair down to the previous lows at .9160. The 100 SMA is below the 200 SMA anyway, which means that the path of least resistance is to the downside. However, an upside break past the 61.8% Fib might be a sign that Aussie bulls are ready to charge and push the pair to the next resistance near the .9700 mark.
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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.