EUR/GBP finally violated a rising trend line that has been respected since early January. Price then attempted to test the broken trend line, but failed to climb higher, forming a descending channel in the process. And as I always say, one of the more conservative ways to play a descending channel is to look for selling opportunities near the channel’s resistance area. Unluckily, the pair is already on its way down, but price seems to be encountering some buyers at the mid-channel area and stochastic is already indicating oversold conditions, so price may move back up again.
Is EUR/USD in for more upside moves? Well, a bullish pennant has formed on the pair’s 1-hour chart, so there’s a possibility for more upside moves. And if that there bullish forex chart pattern holds, and an upside breakout does occur, then we can probably expect the pair to move for around 360 pips since that’s the height of the pennant and its mast or pole. Our moving averages are also indicating a healthy uptrend while stochastic looks like it’s about to move up and away from oversold territory, so we may be seeing more buyers soon.
No fancy forex chart pattern for this one. What we have here is a plain vanilla break-and-retest setup. Anyhow, price smashed past resistance at the 125.50 minor psychological level with sufficient and convincing momentum. However, price began to encounter sellers when it reached the 127.00 major psychological level, and the sellers are pushing price back towards the resistance-turned-support area at 125.50. And if we apply our Fibonacci tool, we can see that the 125.50 price area sits right smack on the 50% Fibonacci retracement level. Stochastic is already indicating oversold conditions, however, so there’s a chance that price will move higher without pulling back. 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