First off, here’s a simple forex trend play building up on GBP/USD’s 1-hour chart. An ascending trend line can be drawn to connect the pair’s recent lows, indicating that an uptrend is taking place. Price is showing signs of retreating to the rising support area and another bounce might happen, possibly around the 1.5300 to 1.5350 psychological levels. Stochastic is already moving up though, which means that pound bulls are ready to charge and push GBP/USD back to its previous highs at the 1.5500 handle.
Reversal alert! The Kiwi might be in for more losses, as a double top formation seems to be forming on its 1-hour forex chart. Price has failed in its last two attempts to break past the resistance around the .7750 minor psychological level and is on its way to test the neckline support near .7550. A break below this area could confirm that a downtrend is underway and this selloff might last by around 200 pips, which is roughly the same height as the chart pattern. Stochastic is pointing down too, suggesting that sellers are in control.
Just when you thought USD/JPY was about to break below its descending triangle support, the pair bounced right back up to test the forex chart pattern’s resistance. Stochastic is still climbing on its 4-hour time frame, suggesting that an upside break might be possible. If that happens, the pair could be in for roughly 300 pips in gains, which is approximately the same size as the triangle formation. However, if the top of the triangle holds as resistance, USD/JPY could head back to the triangle support at 119.00.
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.