Reversal alert! A double top formation can be seen on EUR/GBP’s 4-hour forex chart and it seems that price already broke below the pattern’s neckline. This confirms that a downtrend is underway and that the pair could be in for around 200 pips in losses, which is roughly the same height as the chart pattern. Stochastic is starting to move out of the oversold region though, suggesting that a pullback might take place before price heads any lower.
Next up is an update on the USD/JPY forex channel setup I showed y’all yesterday. The pair did move all the way down to the bottom of the channel around the 119.50 minor psychological level and seems to be finding support right there. At the same time, stochastic is climbing, which means that dollar bulls are taking control of price action and might push the pair back up to the top at the 121.00 major psychological resistance or at least until the middle near the 120.00 to 120.50 levels.
Lastly, here’s a sweet break-and-retest situation on GBP/JPY’s 1-hour forex chart. After breaking below support at the 177.00 major psychological level, price dipped to the 175.00 handle and pulled back up. Using the Fib tool on the latest swing high and low shows that the 50% Fibonacci retracement level lines up with the broken support, which might now act as resistance. Stochastic is already heading down from the overbought zone, hinting that sellers are gaining more steam.
Forex Chart Settings:
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.