Aaah… Breakout! Excuse my forex spin on this 70s hit by Chic but it’s #ThrowbackThursday and I’m seeing a neat break above the descending triangle resistance on GBP/NZD’s 4-hour chart. This means that the pair could be in for an uptrend of around 800 pips, which is roughly the same height as the chart pattern. Stochastic is still moving up but is almost in the overbought zone, which means that buyers might need to take a break soon. Watch out for a potential pullback to the broken triangle resistance if you’re thinking of going long at a better price.
Remember that NZD/USD rising wedge pattern I showed y’all yesterday? Well, price found resistance at the top of the formation as expected then made its way back towards the bottom of the wedge. Stochastic is already in the oversold area, which means that sellers are exhausted and that a bounce off the .7600 major psychological support might take place. If Kiwi bears stay in control, however, the pair could still break below the wedge support and go for a longer-term drop. Take note that the chart pattern is roughly 500 pips tall, which means that the resulting breakout could be of the same size.
Last but not least is my favorite break-and-retest setup playin’ out on NZD/JPY’s 4-hour forex chart! The pair recently surged past resistance around the 91.50 minor psychological level and zoomed towards the 92.00 mark before pulling back. From there, price retreated to the 38.2% Fibonacci retracement level, which coincides with the former resistance area. If this holds as support, NZD/JPY might climb back to the previous highs or even create new ones. Stochastic is still moving down though, suggesting that a deeper correction to the next Fib levels might be in order.
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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.