First up, here’s an update on the GBP/AUD chart I showed y’all yesterday. The pair just broke below the bottom of the range around the 1.9150 minor psychological level and dipped to 1.9000 before pulling back up. Right now, price is retesting the broken support area, which is near the 38.2% Fibonacci retracement level on the 1-hour forex time frame. This level might hold as resistance since stochastic is already indicating overbought conditions and might be ready to turn lower soon. If that happens, GBP/AUD might move back to its previous lows or create new ones.
They say the trend is your friend until the bend at the end. What will it be for CAD/JPY? It looks like the rising trend line on the pair’s 1-hour forex chart is still holding for now and stochastic is suggesting that another bounce is possible. If so, another climb towards the previous highs at the 100.00 major psychological resistance level might be in order. A break below the trend line support near the 99.00 major psychological level might be a sign that the trend is already exhausted and that it’s time for a reversal. Better review our lesson on How to Trade Breakouts if you’re looking to short!
Speaking of reversals, there might be one brewing on USD/CAD’s 1-hour forex chart! The pair has failed in its last two attempts to break below the 1.1950 minor psychological level and seems to be creating a double bottom formation. Price is still more than a hundred pips away from the neckline resistance at the 1.2200 major psychological level, but an upside break above that area could confirm that USD/CAD is in for a climb. Stochastic is already in the overbought region though, which suggests that buyers might need to take a break first.
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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.