Let’s start off with my favorite break-and-retest scenario taking place on GBP/CAD’s 1-hour forex chart. The pair recently broke below the rising trend line and dipped close to the 1.7850 minor psychological support before pulling back up to the broken support area. This lines up with the 1.8050 minor psychological handle and the 61.8% Fibonacci retracement level, which appear to be holding as resistance for now. Stochastic is pointing down, indicating that sellers are in control of price action and may be strong enough to push GBP/CAD back down to its previous lows.
Did GBP/AUD already break past the double bottom chart pattern’s neckline with that weekend gap up? It looks like a reversal from the previous forex downtrend is already underway, as GBP/AUD is showing some serious upside momentum! Stochastic is almost in the overbought area though, which suggests that the weekend gap could still get filled before the pair heads further north. If the rallies continue, GBP/AUD could climb by as much as 200 pips, which is the same height as the chart formation. If you’re going long, make sure you watch out for the nearby resistance at the 1.8350 mark as well!
Will resistance hold? GBP/NZD has zoomed up to the top of the range on its 1-hour forex time frame and may be due to head south if pound bears come back to play. However, a bullish pennant appears to have formed right at the resistance around 2.0560 level, indicating that an upside break is possible. If that happens, the pair could climb by around 250 pips, which is the same height as the rectangle pattern. Take note though that a bearish divergence seems to be forming, with price making slightly lower highs and stochastic drawing higher highs. A move back to the 2.0300 support area could still be likely!
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.