Is it time for a breakout yet? I’ve been watching that symmetrical triangle on EUR/USD’s daily chart for quite some time now, trying to figure out which way it’s going to break out. After hitting the top of the triangle a few days back, the pair slid back to the bottom of the triangle, which seems to be holding as support. Stochastic is still pointing downwards, which means that euro bears could take the pair even lower. But if the bottom of the triangle refuses to give way, EUR/USD could bounce back to the top of the triangle yet again!
Aha! Is that a double bottom on GBP/USD’s 4-hour chart? The pair made a couple of lows just above the 1.5900 major psychological handle and seems to be ready to test the 1.6100 level again. In fact, that support turned resistance level is right in line with the neckline of the double bottom formation! From what I remember in the School of Pipsology, breakouts tend to be the same size as the height of the formation. That means GBP/USD could rally by almost 200 pips if it breaks above the neckline. But if pound bears pounce before that happens, they could take GBP/USD back to its recent lows around 1.5900.
It looks like USD/CHF’s downtrend is still intact, folks! The pair has been bouncing up and down inside a falling channel on it’s 4-hour chart for the past few days, but seems to be stuck in the middle right now. Stochastic is already in the oversold area, suggesting that buyers could take over soon. If that happens, USD/CHF could test the top of the channel once more. But if sellers still have enough energy, they could take the pair all the way down to the bottom around the .8300 handle. Which way do you think it will go?
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. Check him out, playas!