Will the range resistance hold for EUR/AUD? The pair has been pacing back and forth between support at the 1.3950 minor psychological level and resistance at the 1.4350 minor psychological mark for the past few weeks. Price is currently testing the top of the range and may be ready to head south once more or at least until the middle of the range at the 1.4150 area. Stochastic is still pointing up, hinting that euro bulls might have enough energy to push for an upside breakout, which might lead to further rallies for the pair. Make sure you review our lesson on How to Trade Breakouts if you’re thinking of taking that route.
If you like combining Fibs with support and resistance, then you gotta take a look at this break-and-retest play on NZD/JPY’s 1-hour forex chart. The pair had been trading above a rising trend line before it made a breach of support and dropped to the 88.00 major psychological support. From there, the pair is now pulling back to the broken trend line, which lines up with the 50% Fibonacci retracement level and might hold as resistance. Stochastic is almost in the overbought region anyway, hinting that sellers might take control of price action soon and push NZD/JPY back to its previous lows.
If you’d rather go with the flow, then this short-term trend setup on AUD/CAD might work better for you. The pair has been trading below a descending trend line and looks ready to make another test of the resistance soon. Price is finding support around the .9500 major psychological level and may need to pull up to the Fib levels on the 1-hour chart before resuming its drop. In particular, the 61.8% Fibonacci retracement level looks like a pretty good resistance area since it lines up with the trend line and the .9600 major psychological mark. Better wait for stochastic to reach the overbought zone and turn lower before shorting!
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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.