Let’s start off with my favorite break-and-retest scenario on AUD/JPY’s 4-hour forex chart. After breaking past the resistance at the 95.50 minor psychological level and zooming past the 97.00 mark, the pair pulled back to the 61.8% Fibonacci retracement level, which coincides with the broken resistance. Price has been consolidating around that area of quite some time now and stochastic is suggesting that a bounce might take place soon. If so, the pair could move back up to the previous highs near 97.00 or perhaps create new ones. But if the area of interest doesn’t hold as support, AUD/JPY could head down to the next support zone around the 94.50 mark.
Reversal alert! EUR/CAD seems to be tired from its long-term selloff, as it just formed an inverse head and shoulders pattern on its daily forex chart. This means that the pair could be in for an uptrend once price breaks past the neckline resistance at the 1.3800 major psychological mark. For now, stochastic is moving down, which suggests that buyers don’t have enough energy to push for an upside break just yet. Once that happens though, the pair could be in for around 800 pips in gains, which is roughly the same height as the chart formation.
Here’s another break-and-retest play I’m lookin’ at! EUR/USD seems to be having trouble sustaining its climb so it might need to draw more buyers in with this ongoing market correction. The pair is currently retreating to the wide resistance turned support zone around the 1.1050 minor psychological level and might bounce from there. After all, stochastic is moving up from the oversold region, indicating that euro bulls are ready to charge. If so, EUR/USD might be able to climb back to its previous highs just past the 1.1400 major psychological level. If sellers refuse to back down, a break below the area of interest might take place.
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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.