Not another double bottom pattern?! It looks like we’re seeing a bunch of these lately, as comdolls appear to be tired from their recent dive. This reversal pattern has formed on CAD/JPY’s 1-hour forex chart, indicating that an uptrend might be in the works once the pair breaks past the neckline near the 91.00 major psychological resistance. Stochastic is on the move up while a bullish flag has formed, hinting that buyers might still be in control of price action. An upside break could take CAD/JPY up by an additional 200 pips, which is around the same height as the double top formation. However, if the 91.00 handle holds as resistance, price could head back to the previous lows near 89.00. Note that the 100 SMA is still below the 200 SMA, suggesting that the downtrend could resume.
Now this pair has just broken above the neckline of its short-term double bottom pattern and is now pulling back for a retest. Using the Fib tool on the latest swing high and low on the 1-hour forex chart shows that the 38.2% retracement level lines up with the broken resistance and 200 SMA, which appear to be keeping losses in check. At the same time, stochastic is starting to climb out of the oversold area, indicating a pickup in bullish momentum. In that case, price could make a move back up to the previous highs at .7085 or beyond. The 100 SMA is below the 200 SMA for now but it looks like an upward crossover is about to happen, confirming that the reversal could carry on. If the pair is in the mood for a larger correction, it could still retreat to the 50% Fib near the 100 SMA or the 61.8% Fib coinciding with the .7000 major psychological support.
Looks like Happy Pip is onto something with this EUR/NZD triangle breakdown! After moving below the triangle support and dipping below the 1.7300 handle, the pair shifted to correction mode. Applying the Fibs on the breakdown move shows that the 50% retracement level lines up with the 100 SMA, broken support area, and the 1.7600 major psychological mark. Price seems to be finding resistance at the 38.2% Fib already while stochastic is indicating overbought conditions, with a potential selloff lasting until the previous lows or much lower. The 100 SMA is below the 200 SMA anyway, which means that the path of least resistance is to the downside. Note that the triangle pattern is around 700 pips tall so the resulting downtrend could last by the same amount.
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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.