Anybody waiting for a breakout on EUR/USD? I know I am! On its 1-hour forex time frame, the pair is slowly edging higher but is also consolidating inside a rising wedge chart pattern. Price is testing the wedge support around the 1.1350 minor psychological level and 100 SMA at the moment and might be due for a bounce back to the top. Stochastic is still moving down, which means that there might be enough bearish pressure to trigger a downside break. If that happens, EUR/USD could tumble by around 400 pips or roughly the same height as the chart formation.
One bottom, two bottoms… Why, that could be a reversal chart pattern forming on USD/JPY’s 1-hour forex chart! This double bottom suggests that the pair might be done with its selloff and could be ready to resume its longer-term climb. Price is still stalling around the moving averages for now, but an upward crossover could confirm that further gains are likely. USD/JPY has yet to test the neckline resistance near the 124.50 minor psychological mark before confirming that a rally is possible. If that happens, the pair could climb by at least 200 pips or the same height as the chart formation. For now, stochastic is indicating overbought conditions so buyers might still be taking it easy.
Aha, some signs of a pullback on GBP/USD! This pair has been surging nonstop for the past few days so you can imagine how excited Fibonacci fans must be to see that an opportunity to catch the rally at a lower price is presenting itself. Using the Fib tool on the latest swing high and low shows that the 61.8% to 50% levels line up with the moving averages and the rising trend line forming on the 4-hour forex chart. Price could retreat until the 1.5500 to 1.5550 psychological levels before resuming the uptrend, but stochastic is already nearing the oversold region and seems to be suggesting that a shallow pullback is more likely.
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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.