Reversal alert! USD/CAD just formed a double bottom on its 1-hour forex chart, indicating that a short-term reversal might take place. The pair is testing the neckline of the formation around the 1.1325 level while stochastic is climbing, which means that buyers are in control of price action for now. Take note that the chart pattern is roughly 75 pips in height so the resulting rally could be of the same size, which would be enough to take USD/CAD to the next major psychological level at 1.1400. If the neckline holds as strong resistance though, the pair could form another bottom near the 1.1250 area.
Here’s another potential reversal brewing, this time on AUD/USD’s 1-hour forex chart! The pair seems to have formed a sketchy head and shoulders pattern, suggesting that a downtrend is in the cards. Price is still a few pips away from testing the neckline just below the .8700 major psychological mark, with a breakdown likely to take AUD/USD down by at least a hundred pips. Stochastic is still heading south, which means that there’s enough selling pressure left to trigger a downside break, although the oscillator is almost in the oversold region already.
Last but definitely not least is a neat-looking break-and-retest setup on EUR/NZD’s 4-hour forex chart. The pair has recently broken below a key support zone around the 1.6000 major psychological mark and has since fallen to the 1.5700 levels. EUR/NZD seems to be pulling up for a retracement before resuming its drop though, as price could retreat until the 50% Fib and broken support zone. Stochastic is heading higher anyway, which means that there’s enough bullish momentum for a climb at least until the 38.2% Fib, which lines up with the 1.5900 handle.
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.