Here’s an update on the EUR/JPY 4-hour forex chart I showed y’all a few days back. The pair has already pulled up to the broken trend line, which might hold as resistance from now on. A bearish divergence has formed, with stochastic making higher highs and price making lower highs, indicating that the drop might resume sooner or later. The 50% Fibonacci retracement level also appears to be holding as resistance from now on, with a potential selloff likely to last until the previous lows at 137.50. An upside break from the current consolidation, which looks a bit like a bullish pennant, could be a signal for more gains.
Time for a breakout? AUD/USD has been consolidating tightly inside a symmetrical triangle pattern on its 1-hour forex chart, a sign that buyers and sellers are playing a tug-o-war at the moment. A strong breakout in either direction could take place sooner or later, with the potential rally or selloff lasting by as much as 150 pips, which is roughly the same height as the chart pattern. Stochastic is moving higher, indicating that bulls are in control of price action for now. Make sure you review our lesson on trading breakouts and avoiding fakeouts if you’re looking to trade this setup.
If you think the trend is your friend, then you should have a look at this short-term channel play on USD/CHF’s 1-hour time frame. The pair is testing the top of the descending channel, which might continue to hold as resistance. In that case, USD/CHF could soon make its way back to the bottom near the .8900 major psychological level. To top it off, a bearish divergence has formed, with price making lower highs and stochastic drawing higher highs. Stochastic is still moving south, which suggests that there’s enough selling pressure to push price down.
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.