First up, here’s a quick update on the USD/JPY 1-hour forex chart I showed y’all yesterday. As expected, the pair bounced off the bottom of the rising channel around the 115.50 minor psychological support and is now headed for the top once more. With stochastic indicating overbought conditions, the channel resistance near the 117.00 major psychological level might hold as a ceiling and push price back to the bottom of the range. If countertrend setups ain’t your thing, you could sit tight and wait for another test of the channel support to jump in the uptrend. If you think an upside breakout is likely, better have those long orders ready around 117.50!
After that strong selloff and breakdown, GBP/AUD’s got to make a pullback, right? Using the Fib tool on the latest swing high and low on its 4-hour forex chart reveals that the 38.2% Fibonacci retracement level coincides with the broken support zone around the 1.8100-1.8150 psychological levels. This might serve as a potential pullback area, especially since stochastic is making its way out of the oversold area and hinting at a pickup in buying pressure. If the 38.2% Fib holds as resistance, GBP/AUD might make its way back down to its recent lows around the 1.7900 handle or perhaps create new ones.
Reversal alert! EUR/GBP might soon wave goodbye to its downtrend days, as the pair formed a double bottom on its daily forex chart. This classic reversal pattern could be a sign that a long-term uptrend might take place after price breaks past the neckline around the .8000 major psychological level. Stochastic has just reached the overbought zone, although it hasn’t crossed down yet, indicating that there may be a bit of bullish momentum left to trigger an upside break from .8000. If that happens, EUR/GBP could climb by as much as 250 pips, which is the same height as the chart pattern.
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.