Watch out, dollar bears! USD/JPY is currently sitting on an area of interest on its daily forex chart and might be due for a bounce soon. This former resistance level at the 121.00 major psychological mark lines up with the 100 SMA, which has held as a dynamic support area in the past. Stochastic is still moving down, though, so there might still be a bit of selling pressure left to trigger a breakdown. In that case, USD/JPY could head south to the next support around 119.00 or possibly until the 200 SMA. If a bounce takes place, the pair could eventually climb back to its previous highs just below the 126.00 handle.
Will USD/CHF stay inside its symmetrical triangle? The pair is testing the triangle resistance visible on its 4-hour forex chart and might be ready to sell off again, as a bearish divergence seems to have formed. If sellers take control, price could head back to the bottom of the triangle around the .9300 major psychological support, which is also near the moving averages. However, if buyers are able to gain enough momentum, they could push for an upside break and further gains for USD/CHF. Note that the chart pattern is approximately 1,500 pips high so the resulting breakout move could be of the same height.
Now here’s one for the short-term traders out there! NZD/USD has been in a steady downtrend for quite some time, trading below a descending trend line on its 1-hour forex chart. Price is currently testing the trend line, which lines up with the 200 SMA resistance, and might be ready to move back to its previous lows around .6620. Stochastic is starting to move down from the overbought area, confirming that Kiwi bears are on top of their game at the moment. In addition, the 100 SMA is below the 200 SMA, indicating that the downtrend is likely to carry on and that price might even make new lows. Better set those stops above the trend line and 200 SMA if you’re looking to short!
Forex Chart Settings:
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.