Euro bears, unite! If you’re looking for a short setup, you might wanna take a look at this one on EUR/NZD’s 1-hour forex chart. The pair seems to be tired of its recent climb and may be looking to head back down soon, as a head and shoulders formation can be seen. Price is already testing the neckline of the pattern around the 1.5100 major psychological support and a downside break could mark the start of a 300-pip drop, which is the same height as the formation. Stochastic is already indicating oversold conditions though so euro bulls could still come out to play. If the neckline support holds like a boss, a bounce back to the previous highs might be seen.
If you’re a huge fan of Fibonacci, then you should definitely take a look at this pullback setup on GBP/NZD’s 1-hour forex time frame. The pair recently surged past resistance at the 2.1200 major psychological level and zoomed close to the 2.1500 mark before retreating. Price is now testing support at the 38.2% Fibonacci retracement level, which lines up with the broken resistance zone. At the same time, stochastic is starting to turn up from the oversold area, indicating that pound bulls might be ready to charge once more. If so, GBP/NZD could head back to the previous highs or even make new ones.
Here’s another potential reversal setup on a euro pair. EUR/CHF failed in its last two attempts to break past the 1.0500 major psychological mark, creating a double top pattern on its 1-hour forex chart. Price is still a few pips away from the neckline support at the 1.0350 minor psychological level but might be gearing up for a test soon. A break below the neckline could confirm the selloff, which might last by at least 150 pips or the same height as the chart pattern. For now, stochastic is reflecting that buyers are in control but the oscillator could reach the overbought region soon and allow sellers to take over.
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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.