Reversal alert! EUR/USD seems to be tired from all that climbing, as the pair is starting to form a head and shoulders pattern on its 1-hour forex time frame. Price is still a few pips away from testing the neckline around the 1.1150 minor psychological level and may take a while before doing so since stochastic is still moving up from the oversold zone. A break below the formation’s neckline could confirm that a selloff is underway, possibly until the 1.0800 major psychological support and area of interest. If buyers stay in control though, a rally past the previous highs around 1.1400 could take place.
Pound bulls, unite! GBP/USD is on such a strong uptrend that an ascending channel seems to be forming on its 4-hour forex chart. The pair is on its way to test the top of the rising range, possibly around the 1.5700 to 1.5800 major psychological levels. This area might hold as short-term resistance since stochastic is already indicating overbought conditions and is ready to turn lower. If so, price could drop back to the bottom of the channel to test support at the 1.5500 major psychological mark. Watch out for a potential upside break from the channel resistance if buyers get stronger!
NZD/USD is showing signs of a correction from its recent selloff but it seems to be encountering strong resistance at the .7400 major psychological level already. This lines up with a former support area which might keep further gains in check, although stochastic is suggesting that a larger pullback might be possible. Using the Fib tool on the latest swing high and low shows that the 38.2% Fibonacci retracement level is close to the .7500 major psychological level, which lines up with another area of interest. A higher retracement could even last until the .7600 mark, which also coincides with a broken support zone.
Forex Chart Settings:
Slow Stochastic: 14,3,3 100 SMA: Blue line 200 SMA: Red line 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.