Breakout alert! It seems that Cable’s uptrend days might soon be over, as price is breaking below the rising trend line on the 4-hour forex time frame. The pair has already broken below the 100 and 200 simple moving averages, with the short-term SMA gearing up for a downward crossover, suggesting that a potential reversal is in the cards. Stochastic is indicating oversold conditions though, so there’s still a good chance that this might just prove to be a fake out. Make sure you review our lesson on Trading Breakouts if you’re planning to catch a reversal.
Can the Kiwi get its wings back? NZD/USD has plummeted over the past few days but it appears to be finding support at the rising channel forming on the pair’s 4-hour forex chart. Stochastic is already in the oversold zone, which means that sellers are tired and that a bounce could take place soon. In that case, the pair could make it back up to the mid-channel area of interest near the .8700 major psychological level or all the way up to the top at .8900. Just make sure you set your stops right in case it breaks out!
AUD/NZD has been trading inside a rising channel on its 4-hour time frame but it appears that it just can’t get enough of its gains! The pair seems to be breaking past the resistance which lines up with the 1.1000 major psychological level, although stochastic is showing signs that the rally is exhausted. A quick pullback could be what the pair needs to gain more buying momentum, possibly leading to a climb to the 1.1200 major psychological level and beyond. If sellers come charging in though, price could retreat back in the channel.
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.