Remember that EUR/AUD symmetrical triangle pattern I showed y’all last week? Well, price just made a strong downside break and dipped to the 1.4400 mark before pulling back up. At the moment, the pair is retracing to the 61.8% Fibonacci level, which lines up with the broken triangle support. If this area holds as resistance, EUR/AUD might make its way back down to the previous lows while stochastic is moving down from the overbought area, indicating a buildup in selling pressure.
If you’re waiting to catch a forex reversal, this might be your chance! The pair made a couple of failed attempts to break below the 2.0400 major psychological level and seems to be making its way up to resistance around 2.0550. This created a double bottom on the 1-hour chart, indicating that the previous downtrend might be over. Price has yet to break above the neckline before confirming the potential rally, which might last by at least 150 pips. Stochastic seems to be turning from the overbought area for now and pound bears might take over.
If you’d rather stick to the ranges, then you might want to watch this GBP/JPY forex setup closely. The pair has just bounced off support below the 182.00 major psychological mark and is making its way up to the top of the range, which is right around the 184.00 major psychological level. Stochastic is already indicating overbought conditions, which means that buyers are feeling exhausted and that a drop is just waiting to happen. Better wait for reversal candlesticks around the 184.00 mark if you’re planning on shorting at the range resistance!
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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.