Aussie bulls, watch out! AUD/JPY is moving close to the top of the range on its 1-hour forex time frame, as the pair is getting ready to test the 101.00 major psychological resistance. If this holds as a ceiling, price could make its way back to the bottom of the range around the 100.00 major psychological handle. Stochastic is moving down anyway, which means that sellers are taking control of price action. However, if buyers refuse to give way, an upside break could be possible and this might take AUD/JPY up by as much as 100 pips. Be careful of potential fakeouts though!
Check out the consolidation getting tighter and tighter on EUR/NZD’s 1-hour forex chart. The pair is forming a symmetrical triangle pattern, as it made higher lows and lower highs. It seems to have found support at the bottom of the formation once more and is heading for the top around the 1.5950 minor psychological level. If that area holds as resistance, EUR/NZD could make its way back down to the bottom of the triangle. If you think a breakout is bound to take place soon, make sure you set your orders outside the triangle formation. Better review our lesson on How to Trade Triangle Chart Patterns while waiting for a strong move.
Are Aussie bears getting exhausted? After that strong break below the 1.0900 major psychological support level and the resulting drop to 1.0750, AUD/NZD is showing signs of retreating. Using the Fib tool on the latest swing high and low indicates that the 38.2% Fibonacci retracement level is close to the broken support zone, which might act as resistance moving forward. Stochastic is heading north, reflecting a pickup in buying pressure and a potential market correction. If sellers are too eager to jump back in action, AUD/NZD might simply resume its drop from the current levels and create new lows.
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.