After several attempts, the pair finally broke past resistance at the 0.6700 major psychological level, but quickly encountered sellers at 0.6800, the next major psychological level. As a result of the rejection, price is now back at the resistance-turned-support area at 0.6700, giving us a textbook break-and-retest setup to play with. Applying our Fibonacci tool, we can see that the 0.6700 level sits right smack on the 38.2% retracement level, which is a real confidence booster that support will hold. Stochastic is also pointing up and moving away from oversold territory while the moving averages have just crosse-over into uptrend mode, with the 100 SMA acting as dynamic support to boot.
As y’all should know by now, one of the more conservative ways to play a descending channel is to look for opportunities to short near the channel’s resistance area. And as luck would have it, that’s where price is currently at, so y’all better start looking. Looking at our technical indicators, the moving averages are indicating a healthy downtrend, and the 200 SMA is even acting as dynamic resistance. Stochastic, meanwhile, is pointing down and moving away from the overbought region, so forex traders who are bearish on the pair may be taking control already.
NZD/JPY recently broke higher past resistance at the 76.30 handle after trading sideways for several weeks. However, the pair was repulsed when it reached the 77.80 handle, giving us yet another break-and-retest setup to play with. Price is currently milling about at the 76.30 handle, which happens to line up rather nicely with the 38.2% Fibonacci retracement level. Stochastic is also beginning to move away from the oversold region while the 100 SMA seems to be acting as dynamic support. As usual, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, alright?
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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