Let’s start off with this pullback situation on EUR/USD’s 4-hour forex chart. The pair has made a sharp breakdown nearly a month ago, but the selloff lasted only until the 1.3500 area. From there, price showed signs of retracing, possibly until the Fib levels marked on this chart. Stochastic is already in the overbought zone but hasn’t crossed down, indicating that there may be a bit of energy left among buyers to push the pair to the area of interest near the 1.3750 minor psychological handle and 50% Fibonacci retracement level.
Looking to jump in a euro short position right away? Then you might like this break-and retest-setup already starting to play out on EUR/NZD’s 1-hour forex chart. Price seems to have found resistance at the 38.2% Fibonacci retracement level and former support area, suggesting that the downtrend is ready to resume. Stochastic has already crossed out of the overbought area and is making its way down, which means that sellers are in control at the moment. With that, this pair might head for its previous lows near the 1.5500 support level or try to make new ones!
If you’re feeling more adventurous and would rather go for breakout plays, then this setup is just for you! GBP/AUD has been consolidating inside a descending triangle forex chart pattern on its 1-hour time frame and may be ready to make a break for it anytime soon. Price is already near the top of the triangle yet stochastic is pointing up, which suggests that price could make an upside break and head further north. If bears take over though, another test of the triangle support might take place and perhaps a breakdown if selling pressure is strong enough. Either way, the breakout move might last by as much as 200 pips so y’all should keep your eyes glued on this one!
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.