Time for a Kiwi pullback? NZD/USD looks ready to retrace to the Fib levels on its 1-hour forex chart, as sellers needed to take a break. The 38.2% Fibonacci retracement level lines up with the .7850 minor psychological level and the 100 SMA, which might act as resistance in case the pullback is shallow. A higher retracement could last until the 50% to 61.8% Fibs, which also line up with major and minor psychological levels. Stochastic is already in the overbought area though, indicating that sellers could be back in action in a bit!
Bounce or break? AUD/JPY is currently testing the top of the falling trend channel on its 1-hour forex time frame, waiting to see if the downtrend will carry on or not. Stochastic seems to be favoring another selloff, as the oscillator is starting to move out of the overbought area and reflect a pickup in selling pressure. A drop could take AUD/JPY back to the bottom of the channel, which is around the 94.25 level, while an upside breakout past the 96.00 mark could signal a reversal for the pair. Make sure you review our lesson on Trading Breakouts if you’re bullish on this one!
Careful, euro bears! EUR/GBP is moving close to a long-term support zone, which has held in the past few years. A bounce from the .7750 forex floor could take place sooner or later, as stochastic is moving close to the oversold area. In that case, EUR/GBP could climb back to the nearby area of interest at the .8000 major psychological mark or perhaps until .8200 if buying momentum is strong enough. On the other hand, a downside break from these current levels could indicate that more losses are in the cards for this pair. After all, price has been forming lower highs recently.
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.