After that strong climb, Aussie bulls gotta take a break, right? AUD/JPY appears to have found short-term forex resistance around 98.75 and may retrace before heading any higher. Using the Fibonacci retracement tool on the latest swing low and high on the 4-hour chart shows that the broken resistance at the 96.00 major psychological level is right in between the 50% and 61.8% Fib levels. Stochastic is still moving down, which means that price has room to dip until that potential support zone. Watch out for a bounce off the 38.2% Fib in case the pullback is a shallow one!
If you think the trend is your friend, then you might wanna keep your eyes glued to this rising trend line setup on USD/JPY’s 1-hour forex chart. With the 106.50 handle holding as resistance for now and stochastic moving down, the pair is retreating off its recent highs and might make a test of support. It could retrace to the 50% Fibonacci level, which lines up with the trend line and the 105.50 minor psychological handle. At the same time, the 100 and 200 simple moving averages are close to the rising trend line, adding to the strength of that support zone.
In the mood for a countertrend trade? Check out this falling channel bounce on NZD/USD’s 1-hour forex time frame! The pair has been moving inside a descending trend channel in the past few weeks and is currently finding support at the bottom. Just when it seemed like NZD/USD was ready to breach support, Kiwi bulls pushed the pair right back inside the range, suggesting that a rally might still be possible. In that case, price could move all the way back to the top of the channel near the .8300 major psychological level. Be careful once stochastic reaches the overbought area and turns down though, as this could indicate that Kiwi bears are back!
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.