Let’s start off with a simple reversal chart pattern on EUR/JPY’s 4-hour time frame. As you can see from the forex chart above, the pair has formed a double top formation and is currently testing the neckline. A breakdown could lead to a 300-pip drop, which is the same height as that of the chart pattern. Be careful though! Stochastic is already deep in the oversold region, indicating that euro bears could use a break. Better wait for an actual downside break before jumping in.
If you like following trends, then this one is just for you! The rising channel on GBP/USD’s 4-hour chart is holding so far, indicating that the uptrend is still intact. After bouncing off the 1.6600 major psychological support area and the bottom of the channel, the pair looks ready to head further north and test the top of the channel. Do watch out for potential resistance around the previous highs near the 1.6800 mark, as stochastic is already indicating overbought conditions.
Here’s an update on the USD/CHF chart I showed y’all in yesterday’s edition of Daily Forex Chart Art. After forming a spinning top and an evening star reversal candlestick pattern on the 50% Fibonacci retracement level and former support area, the pair is already showing enough downward momentum to test the previous lows around the .8700 major psychological level. That’s almost 200 pips away! Stochastic is making its way down from the overbought area, indicating that dollar bears are in control, so it’s not too late to hop in if you’re bearish on this pair!
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.