Bounce or break? What’s it gonna be, AUD/USD? On its 1-hour forex chart, the pair has been moving inside an 80-pip range between the .9220 support area and resistance at the .9300 major psychological level. At the moment, AUD/USD is testing resistance but stochastic isn’t offering good clues on where price could be headed next. It looks like a bullish continuation pattern has formed close to the top of the range but if .9300 holds like a boss, AUD/USD could head back to the bottom of the range.
Is that an ascending triangle forming on Guppy’s 4-hour time frame? The top of the triangle around the 173.00 major psychological level seems to be holding so far, as the pair has fallen back to the middle of the triangle after testing resistance. Stochastic is indicating oversold conditions, suggesting that a bounce might take place soon. Better keep your eyes glued to the bottom of the triangle, as buyers might be waiting to jump in around this support zone!
Check out this bullish divergence on EUR/JPY’s 4-hour forex chart! The pair has been moving inside a symmetrical triangle for quite some time now, and it looks like the bottom of the triangle might still hold as support for now. After all, stochastic has drawn lower lows while price has created higher lows. A bounce could take the pair back to the top of the triangle but a breakdown is still possible if euro bears are strong enough. Make sure you check if this setup meets the 9 Rules for Trading Divergences if you plan to go long!
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.