Aha! Finally some signs of a pullback on Cable! After the pair’s stellar rally to the 1.5800 major psychological level, the pair seems to be retreating to draw more bulls to the forex game. Using the handy-dandy Fib tool on the latest swing high and low shows that the 38.2% Fibonacci retracement level coincides with the rising trend line and the 1.5500 major psychological mark. If this area holds as support, the pair could head back to its previous highs or even make new ones. Stochastic is already indicating oversold conditions anyway, which means that sellers might need to take a break and let buyers take over.
USD/JPY probably has R. Kelly’s Ignition (remix) on loop for the past couple of months because it has done nothin’ but bounce, bounce, bounce, bounce inside its range on the 4-hour forex chart. Just recently, the pair hit support around the 119.00 major psychological level and seems to be headed back for the top of the range at the 120.50 minor psychological mark. At the same time, stochastic is moving north, indicating that dollar bulls are in control of price action for now. Think this range could still hold? If you’re hoping to short at the resistance, make sure you wait for reversal candlesticks or for stochastic to start moving down from the overbought region as confirmation.
Reversal alert! USD/CHF looks exhausted from its recent dive and may need to pull up for some air, as the pair failed in its last two attempts to break below the .9100 mark. A double bottom pattern can be seen forming on the pair’s 4-hour forex chart, suggesting that an uptrend might take place soon. Of course price still has to break past the pattern’s neckline near the .9400 major psychological resistance before confirming the potential reversal, which might last by around 300 pips. Stochastic is climbing, which means that there’s enough bullish momentum to spur an upside breakout from the neckline. Better review our lesson on How to Trade Double Bottom Formations if you’re looking to go 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.