Time for USD/JPY to bounce? The pair is once again testing the bottom of the range on its 4-hour forex chart and may be ready to head back up from the 119.00 major psychological support. Stochastic is moving higher, confirming that buyers are starting to take control of price action and that a climb to the top of the range around the 120.50 minor psychological resistance might take place. However, if sellers refuse to give in, they could push for a downside break of support and a longer-term drop for USD/JPY. Watch out for a strong candle close below 118.50 if you’re hoping to catch a breakdown!
Next up is a potential break-and-retest play on AUD/USD’s 1-hour forex time frame. The pair has recently surged past resistance around the .8000 to .8050 levels then topped out at the .8150 minor psychological mark. Price pulled back from there and may be trying to find support at the Fibonacci retracement levels. In particular, the 50% Fib lines up with the broken resistance level, which might hold as strong support from now on. Stochastic is still moving down though, indicating that the correction is still taking place. Just make sure you set your stops below the lowest Fib if you’re thinking of going long on this pullback!
Anybody up for a countertrend trade? Here’s a simple one forming on EUR/USD’s 1-hour forex chart. The pair has been moving inside an ascending channel, showing that an uptrend is going on, but price is currently finding resistance at the top of the rising range. If this area continues to keep gains in check, EUR/USD could move back to the bottom of the channel near the 1.1200 to 1.1250 levels. Stochastic is indicating overbought conditions anyway, which means that euro bulls might need to take a break and let sellers take control. If you’d like to follow the trend though, better wait for an actual test of channel support before going long.
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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.