Remember that AUD/JPY descending triangle pattern I showed y’all yesterday? Well, price already made a break below the support at the 96.00 major psychological level and seems to be ready for a downtrend. However, a quick pullback is taking place, as the pair is retesting the broken support area, which lines up with the 50% Fibonacci retracement level. Stochastic is pointing up, suggesting that bulls are in control at the moment, but a return in selling momentum could lead to a test of the previous lows or the creation of new ones.
Here’s a break-and-retest setup that’s just about to play out! CAD/JPY recently broke below the 100.00 major psychological level and dipped to the 97.00 mark before showing signs of a pullback. Using the Fib tool on the latest swing high and low on the 4-hour forex chart indicates that the 61.8% Fibonacci retracement level lines up with the broken support area and might act as resistance. Stochastic is heading north anyway, which means that Loonie bulls might have enough energy to take price up to the 100.00 handle again.
Last but not least is another update on NZD/JPY’s ascending triangle setup. After the pair made a strong break of support a few days back, it looks ready to make a pullback to the broken support zone before resuming its drop. As you can see from the chart above, the 61.8% Fibonacci retracement level lines up with the broken triangle support close to the 92.00 major psychological mark. With stochastic moving out of the oversold zone, a correction might take place for now before this pair heads further south. Just make sure you set your stops right if you’re planning to short around the Fib levels!
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.