Let’s start off the week with a look at a potential pullback play on USD/JPY’s 4-hour chart. After successfully posting a new “lower low,” the pair seems like it is ready to retrace. It just broke out of a double bottom formation, which is considered as a bullish reversal chart pattern. With the stochastic also showing that conditions are oversold, we could see the pair climb even higher and test the descending trend line. It could be the perfect time for bearish traders to jump in short!
Can the Cable bulls keep surging higher? Price action on GBP/USD is stalling right now, but if past price action is any indication, this could just be a sign that the bulls are gearing themselves up for another run up the charts. Be on the lookout for a bullish marubozu candle as a sign that buying momentum has taken over!
Higher highs and higher lows… Why, that’s a rising channel right there! EUR/USD seems to be headed for more gains, as the pair’s uptrend is still intact. EUR/USD is currently stalling in the middle of the channel while stochastic is in the overbought region, suggesting a potential move down. If that’s the case, the pair could make another test of the channel support and possibly make another bounce!
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.