Think the trend is your friend? Then you shouldn’t miss out on this potential downtrend play on AUD/USD’s 1-hour forex chart! Price has been moving below a falling trend line connecting the latest highs and looks ready to make another test of resistance. Stochastic is moving higher anyway, reflecting enough buying pressure to lead to a pullback to the .8825-.8850 area. Make sure you wait for the oscillator to reach the overbought area and turn lower before shorting or watch out for reversal candlestick patterns right on the trend line. Just be ready with your stops in case AUD/USD makes an upside breakout!
Could this be the end of USD/JPY’s climb? The pair is forming a double top forex chart pattern on its 1-hour time frame, indicating that a reversal might take place. Price has yet to break below the neckline near the 108.00 major psychological handle before confirming that a selloff will take place. If that happens, USD/JPY could drop by as much as 150 pips, which is the same height as the chart formation. Be careful since stochastic is already in the oversold area, suggesting that another bounce might take place before the pair heads any lower.
Here’s a potential break-and-retest forex play on EUR/USD’s 1-hour time frame. Price has been heading south recently but it looks like bears need to take a break for now. With that, EUR/USD could pull up to the Fib levels while stochastic makes its way towards the overbought zone. The pair could find resistance at the 1.2800 major psychological handle, which lines up with the 50% Fibonacci retracement level and the falling trend line connecting the latest highs. A higher retracement might last until the 61.8% Fib, which lines up with a broken support zone, before euro bears take control once more.
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.