Aaah… Breakout! Pardon my 70s throwback mood but AUD/USD just broke above the 1.0400 major psychological resistance level which has been holding for more than a week already. The pair stalled around the 1.0450 minor psychological level and appears ready to pullback and retest the broken resistance level. What a coincidence! That level lines up with the 61.8% Fibonacci retracement level, which could also act as strong support for the pair.
Time to bounce? USD/CAD is once again testing the rising trend line on the 4-hour time frame as it retreated to the 1.0200 major psychological support area. Stochastic is still climbing, which suggests that it might not be too late to catch the rally. If the pair keeps rising, it could make another test of the recent highs around 1.0330. Make sure you set your stop below the trend line or 1.0200 handle if you’re planning to go long!
Don’t look now but NZD/USD is currently testing the top of the range on its 4-hour chart! Do you think it’ll break this time or will it still hold? Stochastic is in the overbought region, which suggests that Kiwi bulls are running out of steam. If the pair heads south, it could reach the bottom of the range around .8200 again. That’s a pretty huge green candle though so there could be a chance that Kiwi bulls are still strong enough to go for an upside breakout!
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.