Did you catch the huge move down on GBP/USD from the 1.5800 area? If you didn’t, don’t ya worry, as it looks like price action is giving traders a chance to jump in short again! As you can see, there are a lot of bearish signals on the pair’s 4-hour chart. First, the pair is currently testing the previously broken rising trend line. Second, the pair is hanging around the 38.2% and 50.0% Fibonacci retracement levels. And last, the Stochastic shows that conditions are overbought. If you’re bearish on the British Pound, look to possibly sell the pair once it shows some candlestick reversal patterns.
USD/JPY seems to be on a steady uptrend with a rising channel forming on its 4-hour chart. With the pair about to test the bottom boundary of the channel and the formation of the bullish divergence, it looks like we could see the pair make its way back up again. USD/JPY bulls, watch this pair carefully!
EUR/JPY, after falling from the 101.50 level, is now facing a major support level area around the 1.5300 psychological level. The pair hasn’t shown any signs of reversal yet, but the Stochastic shows that conditions may be oversold. This suggests that the bears could be running out of steam and the bulls could take over again.
Before you get carried away with all these chart patterns, remember that technical analysis is only half the story.
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.