Heads up! Descending triangle forming on EUR/GBP! The pair has made lower highs and is currently testing support near the .8300 major psychological level. Stochastic is moving higher, which means that this pair might move back to the top of the triangle once again. If this baby breaks out in either direction though, it could rally or drop by at least 150 pips, which is approximately the same height as the triangle formation.
Here’s one for my buddies who also dig break-and-retest setups like I do! AUD/NZD recently broke below the major support level at 1.1200, but it appears that Aussie bears needed to gather more steam before pushing this pair lower. Stochastic is indicating overbought conditions, which means that the selloff could resume anytime soon. Do check out our lesson on combining Fibs with support and resistance if you’re thinking of shorting.
Last but not least is a potential long-term play that you wouldn’t want to miss. GBP/USD just made an upside break from its 300-pip range, which suggests that further rallies could be in the cards. According to our School lesson on rectangles, the resulting breakout could be of the same height as the previous range so Cable might be aiming for the 1.6600 level next. Be careful though, as stochastic is already deep in the overbought area!
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.