Check out the consolidation gettin’ tighter and tighter on AUD/USD’s 1-hour forex time frame! The pair has been forming a symmetrical triangle chart pattern, perhaps gearing up for a breakout sooner or later. For now, price looks ready to make another test of the triangle support near the .8700 major psychological level, as stochastic is pointing down. A bounce could take it back to the top of the triangle, which is around the .8800 major psychological resistance. If you’d rather wait for a breakout in either direction, keep in mind that the chart pattern is roughly 350 pips tall so the resulting move could be of the same size.
Who’s up for a simple retracement setup? Here’s one forming on USD/JPY’s 1-hour forex chart! The pair has gapped up over the weekend, indicating that buyers are very much in control and might push for more gains. However, USD/JPY is already hovering around a potential resistance zone at the 38.2% Fibonacci retracement level while stochastic is reflecting overbought conditions. A higher retracement might last until the 50% to 61.8% Fibs, which line up with an area of interest. If the selloff resumes soon, price could drop back to its previous lows around the 105.50 minor psychological support.
Looks like EUR/USD could stay in its short-term uptrend for now, as price is still moving inside a rising channel on its 1-hour forex time frame. The pair looks ready to test the channel support around the 1.2700-1.2730 area and might be due for a bounce back to the channel resistance past the 1.2900 mark. However, a sudden return in selling pressure might lead to a break below the bottom of the channel and possibly a longer-term downtrend for EUR/USD. Don’t forget to review our lesson on How to Trade Breakouts if you’re thinking of shorting!
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.