Do I sense a EUR/JPY selloff in the works? That head and shoulders pattern that just formed on the pair’s 4-hour time frame is hinting that a reversal of the uptrend might take place anytime soon. EUR/JPY is still stalling at the neckline around the 114.00 handle at the moment so y’all better wait for a clean break below that level if you’re planning to short. Keep in mind that the pattern is roughly 200 pips tall, which means that the potential selloff could be around that size as well.
Based on its daily chart, AUD/USD is still in a steady long-term uptrend as the pair has been climbing inside a rising channel. AUD/USD seems to be stuck somewhere in the middle of the channel for now but stochastic suggests that Aussie bulls could still push the pair higher. The top of the channel is in line with the 1.0600 major psychological level, which means that it could act as strong resistance later on.
If you’re bearish on the yen, here’s a potential retracement play that you might want to try out. After its recent rallies, CAD/JPY encountered resistance at the 89.00 mark and seems ready for a quick pullback. The Fibs are in line with major and minor psychological levels, which usually act as inflection points for yen pairs. Note that stochastic just reached the oversold zone, which means that CAD/JPY is almost ready to 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.