Let’s start off with a simple break-and-retest setup on Cable. The pair made a pretty strong bounce off its recent lows and zoomed up above the 1.5000 major psychological level. Price retreated quickly upon testing the Fibs, which might continue to hold as resistance. In fact, the 38.2% Fibonacci retracement level lines up with a broken support area and might keep further gains in check. Stochastic is climbing out of the oversold area though, hinting that pound bulls are still in control.
Anybody up for a range setup? It seems that USD/CAD is forming a new range on its 4-hour forex chart, as price bounced off the resistance at the 1.2800 major psychological level and might be headed for support at the 1.2400 major psychological mark. Stochastic is moving down, reflecting how sellers might be strong enough to push prices lower. If the bottom of the range holds as support once more, USD/CAD could make its way back up to the top of the range. Better watch out for reversal candlesticks on the support level if you’re thinking of going long.
Reversal alert! The Kiwi could take flight soon, as NZD/USD formed a reversal pattern on its 4-hour forex chart. The pair created a double bottom with the neckline around the .7600 major psychological level, indicating that the recent downtrend might be over. Price has yet to break above the neckline before confirming the potential reversal, which might last by approximately 400 pips – the same height as the chart pattern. Stochastic is still moving up so Kiwi bulls might have enough energy to push for more gains. If the neckline resistance holds, price might make its way back down to the previous lows around .7200.
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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.