First up, an update on the EUR/AUD head and shoulders pattern I shared with y’all a few days back. It finally made a break for it! The pair is currently trading below the neckline of the formation and possibly looking at further declines, as the pattern is roughly 800 pips high. Stochastic hasn’t crossed up from the oversold region yet, indicating that euro bears are still pumped up and that EUR/AUD could eventually make it all the way down to the next support area around 1.4200.
Is this pair ready to bounce? USD/CAD could form a rising channel on its 4-hour time frame if it bounces off the ascending trend line support around the 1.1000 major psychological level. Stochastic has been indicating oversold conditions for almost a week already, hinting that dollar bulls are ready to push the pair back up. If that happens, USD/CAD might climb to the mid-channel resistance near the 1.1150 minor psychological level.
Last but not least is a potential reversal on AUD/NZD’s 4-hour time frame. The pair appears to be drawing an inverse head and shoulders formation, with the neckline around the 1.0750 minor psychological level. Stochastic is moving out of the oversold zone, which suggests that further rallies are in the cards. Keep your eyes peeled for an upside break, as a confirmed uptrend might last for roughly 200 pips!
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.