Careful, Kiwi bulls! NZD/USD just found resistance at the top of the descending trend channel on its 4-hour forex chart and may be headed lower. It is currently approaching the mid-channel area of interest near the .7700 major psychological level while stochastic is moving down. A bounce off this support zone could lead to another test of the channel resistance around .7850 while a breakdown could mean further losses until the bottom of the channel at the .7600 major psychological mark.
Now here’s a simple Fib retracement play on AUD/USD’s 1-hour forex chart. Price previously broke through resistance around the .8150 minor psychological level and zoomed up to the .8250 mark before retreating. At the moment, it is testing the former resistance area, which lines up with the 50% Fibonacci retracement level. Stochastic is moving up, indicating that Aussie bulls are in control and that the pair might climb back to its previous highs. A break below the lowest Fib, however, might mean that further losses are in the cards.
Remember that NZD/JPY ascending triangle pattern I showed y’all a few days back? At that time, the pair was just testing the triangle resistance, which held like a boss. NZD/JPY is now making a break below support and could be in for more declines, although stochastic is indicating that Kiwi bears are already feeling exhausted. With the forex chart pattern roughly 450 pips in height, the resulting long-term selloff could be of the same size. If this proves to be a fakeout though, another test of the triangle resistance might happen.
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.