AUD/USD broke out of a descending channel with sufficient and convincing momentum today. But the pair is now currently at the 0.7400 major psychological area, a price area of very significant market interest in the past. Stochastic is already indicating potentially overbought conditions as well, so forex traders bullish on the pair may be exhausted already. If resistance does form, then sellers may attempt a downside move. In which case, the most likely target would be the minor psychological level at 0.7350 since that price area sits right smack on the 38.2% Fibonacci retracement level and it’s also a price area of recent market interest.
Price jumped up with great velocity, but it looks like it’s now at the 91.70 handle, a price area of very, very significant market interest, even on the higher time frames. Stochastic is also in overbought territory, so sellers may be coming in soon. It’s possible that bulls will try to reach the 92.00 major psychological level first before finding resistance, though, since the bullish momentum is so strong. In any case, if price does find resistance, it would most likely pull back to 38.2% Fibonacci level since that level lines up quite nicely with the 91.00 major psychological level, which is incidentally a price area of major interest to forex traders.
AUD/NZD has recently validated a massive descending channel on its 1-hour forex chart. The basic and conservative way to play this forex chart pattern is to look for resistance near the top of the channel. And while price is almost at the top of the channel, it’s still not quite there. Resistance may potentially form at current price levels around the 1.1230 handle, though, since forex traders have viewed it as a price area of interest in the past. But that doesn’t mean that price will attempt to reach the top of the channel around the 1.3000 major psychological level first.
Anyway, stochastic is already in the overbought area, so sellers may be coming in soon. But given the bullish momentum, there is a chance for an upside breakout. If that is indeed the case, price may retrace to the 38.2% Fibonacci retracement area around the 1.1150 minor psychological level first before attempting to do so.
As usual, make sure to practice proper risk management should you find a trade based on any of these charts.
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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.AUD/CAD 1-hour Forex Chart