After a strong downward move this session, price was rejected at 134.00–a major psychological level and price area of significant market interest. Price tested the 134.00 level and was rejected again just a couple of hours ago, so is this a sign that support has formed? Our indicators seem to favor an upside move: stochastics is pointing to potentially oversold conditions while the 100 SMA and 200 SMA are still in uptrend mode.
Forex traders who are long on the euro should watch out for the minor psychological level at 134.50, though. It too is a price area of significant market interest, having halted the pair’s bounce from the 134.00 level.
Area pattern time! Looks like GBP/AUD has been consolidating into a symmetrical(ish) triangle area pattern. As with all triangle patterns, there is no directional bias, so an upside breakout is just as likely as a downside breakout. Stochastic seems to favor an upside move because it is currently in potentially oversold territory. And as for the moving averages, the 100 SMA and 200 SMA are oscillating, indicating that there is no clear direction just yet and t
Price seems to have hesitated at the 1.5450 minor psychological level which also happens to be a price area of significant market interest in the past, as highlighted by the rectangle. Our indicators support a potential exhaustion of the recent move lower with the stochastic in oversold territory and the 100 SMA and 200 SMA still in uptrend mode. Will buyers hop back in? We’ll just have to wait and see!
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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.