Talk about getting mixed signals! AUD/USD has shown a bullish pennant on the 4-hour forex chart I showed y’all yesterday but now I’m seeing a double top formation on its 1-hour time frame. Stochastic is on middle ground and is not offering any good clues at the moment, but it looks like the pair is testing the neckline of the pattern around .9225. The formation is roughly 75 pips high, which suggests that the potential breakdown could be of the same size.
Reversal time for CAD/JPY? The pair has formed a triple bottom formation on its 4-hour chart, as price bounced off the 91.00 support level three times this year. The neckline is located near the 94.00 handle and it appears that CAD/JPY is already making a break for it. Be careful though! Stochastic has already reached the overbought zone, indicating that Loonie bulls are running out of steam. A legit breakout could last by as much as 300 pips while a false break could lead to another test of the 91.00 support.
As for the Kiwi, I decided to pull up the NZD/CHF chart to see if there’s anything interesting there. Whad’ya know? The pair is showing my favorite break-and-retest scenario on its 4-hour time frame! It appears to be retesting the broken resistance area right around the .7600 major psychological level, which is in between the 50% and 38.2% Fibonacci retracement levels. Stochastic is indicating oversold conditions, hinting at a possible bounce!
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.