First up, here’s an update on the NZD/USD 1-hour forex chart I showed y’all last week. The pair is now testing support at the bottom of the rising trend channel, just above the .7800 major psychological mark. To top it off, a bullish divergence has formed, with price making lower lows and stochastic drawing higher lows. If a bounce takes place, NZD/USD could make its way back to the top of the channel near the .8000 major psychological resistance. Make sure you set your stop below the .7800 handle if you’re thinking of going long!
Here’s a rising trend line that’s just about to form on CAD/JPY’s 4-hour forex chart! Using the Fib tool on the latest swing low and high shows that the 61.8% Fibonacci retracement level might act as support, as this lines up with the trend line and the 95.50 minor psychological level. Stochastic is already indicating oversold conditions, which suggests that a rally might take place sooner or later. If that happens, CAD/JPY could eventually make its way back to the previous highs near the 100.00 mark. However, a break below the Fibs might be a sign that a reversal is in the cards.
Breakdown alert! EUR/JPY appears to be making a break below the descending triangle formation on its daily forex chart, indicating that the pair could be in for a longer-term drop. Stochastic is already in the oversold area but isn’t showing any signs of moving higher for now, which means that bears are still in control. Take note that the chart pattern is close to a thousand pips in height, which means that the resulting selloff could be of the same size. If you’re planning on shorting, better wait for more confirmation to make sure that this breakout ain’t a fakeout!
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.