Looks like Happy Pip is onto something with this one! CAD/JPY might be in for a selloff, as the top of its range visible on the 1-hour forex chart is still holding as resistance… for now. If Loonie bears jump in, price can fall back to the bottom of the range at the 89.00 major psychological support or at least until the area of interest around the middle. However, technical indicators are hinting that an upside break might be in the cards, as the 100 SMA is moving farther away from the 200 SMA while stochastic has just reached the oversold region. An break above the resistance at the 92.00 major psychological mark could take CAD/JPY up by an additional 300 pips, which is the same size as the range formation.
If you’d rather follow trends, then you might like this setup on EUR/JPY’s 1-hour forex chart much better. The pair has been trading higher, moving inside a new ascending channel on its short-term time frame. Price just bounced off the top of the channel and might be ready to test the support around the 134.25-134.50 levels. The 100 SMA just crossed above the longer-term 200 SMA, confirming that the uptrend is likely to carry on and that a bounce might take place soon. Stochastic is already making its way up from the oversold area, indicating that euro bulls are taking control of price action and that the mid-channel area of interest near the 135.00 major psychological level might already hold as support. In that case, EUR/JPY could climb back to the channel resistance at 136.00 pretty soon.
Remember that long-term Guppy channel bounce I showed y’all yesterday? Well, the pair is showing another sign that further gains are possible, as a double bottom pattern is starting to form on its 4-hour forex chart. Price has been unable to break below the 180.00 major psychological mark on its second attempt and might make its way back to test the neckline around the 188.00 major psychological level. A break above this level could send the pair up by an additional 800 pips or the same height as the chart formation. The moving averages are inching closer together, suggesting that an upward crossover might be brewing. However, stochastic is indicating overbought conditions for now, which means that pound bulls might need to take a break in a while.
Forex Chart Settings:
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.