Careful, Aussie bears! AUD/USD seems ready to reverse from its long-term downtrend, as a double bottom pattern can be seen on its 4-hour forex chart. The pair has failed in its last two attempts to break below the .7650 minor psychological level but has yet to move past the neckline of the formation around the .7850 mark. If that happens, AUD/USD could be in for a 200-pip climb, which is the same height as the chart pattern. If Aussie bulls are strong enough, they could even push the pair up to that next resistance level around .8200.
Here’s another potential reversal play, this time on USD/JPY’s 1-hour forex chart. A head and shoulders forex chart pattern seems to be forming, as price is still testing the neckline around 118.50. A break below this support level could mean a 200-pip drop, which is roughly the same size as the chart pattern. Stochastic is moving up for now though, indicating that buyers are still in control. If the 118.50 minor psychological level continues to hold as support, another bounce up to the previous highs at 120.50 could still be possible!
Now here’s a fresh forex chart pattern that might hold for a while… USD/CAD has been making lower highs and finding support at the 1.2400 major psychological level, creating a descending triangle formation on its 1-hour chart. At the moment, the pair is testing the bottom of the triangle and may be due for a bounce back to the top, especially since stochastic is moving out of the oversold region. In that case, a move towards the 1.2600 major psychological level near the triangle resistance might take place.
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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.