Kiwi bulls, watch out! A double top formation can be seen on NZD/JPY’s longer-term forex time frames, indicating that the uptrend may soon reverse. Price has made a couple of failed attempts to break past the 90.00 major psychological level and found support around 86.50, which is the neckline of the chart pattern. A break below this area could confirm that further losses are in the cards and that the pair might head south by as much as 350 pips, which is the same height as the formation. Stochastic is moving out of the oversold area though, indicating that buyers aren’t giving in anytime soon.
Here’s another potential selloff for a yen pair, as CAD/JPY is finding resistance at the top of the descending triangle pattern on its daily forex chart. Price is stalling above the 94.00 major psychological support but a breakdown could be a sign that there’s enough selling pressure to lead to a drop to support near 92.00. Be careful since stochastic is starting to climb out of the oversold area, which means that bulls are ready to push the pair back up. Keep your eyes glued on the 95.00 mark to see if the pair is breaking out!
Last but definitely not least is a potential break-and-retest situation goin’ on in CHF/JPY’s 4-hour forex chart. As you can see, price recently made a strong break below the support area at the 113.00 major psychological level before hitting a low of 112.26 and bouncing back up. The pair could make a pullback to the broken support zone, which lines up with the 38.2% Fibonacci retracement level before heading any lower. Stochastic is on middle ground but is pointing down, indicating that sellers are still in control for now.
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.