Let’s start off with this neat chart pattern forming on NZD/JPY’s 4-hour forex chart. Price formed higher lows recently and found resistance just below the 94.00 major psychological mark, creating an ascending triangle formation. The pair is currently testing the top of the triangle, still deciding whether to make a break for it or to head back down towards support at the 92.50 minor psychological mark. Stochastic is almost in the overbought area, indicating that Kiwi bears might take control of price action soon. Better review our lesson on How to Trade Triangle Patterns if you’re planning on playing this one!
Trend traders, huddle up! Here’s a simple downtrend play on EUR/CAD’s 1-hour forex time frame that you might wanna look at. The pair is taking a break from its latest slide after finding support at the 1.3900 major psychological support. Drawing the Fib tool on the swing high and low shows that the 50%-61.8% levels line up with the descending trend line right around the 1.4000 handle, which might hold as resistance. In addition, stochastic is already moving down from the overbought area, reflecting a pickup in selling pressure. If any of the Fib levels hold as resistance, EUR/CAD could be on track to make new lows.
Is that a double bottom pattern I’m seeing on AUD/JPY’s 4-hour forex chart? Price has failed in its attempts to break below the 96.00 major psychological support and seems to be exhausted from its selloff. AUD/JPY has yet to break past the neckline around the 98.00 mark before confirming the potential reversal, which might last by at least 200 pips – the same height as the chart pattern. However, if the neckline holds as resistance for now, price could make another test of 96.00 and create a triple bottom pattern. Stochastic is giving the overbought signal after all, which suggests that Aussie bears could take control.
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.