First up, let’s start with this break-and-retest setup visible on EUR/NZD’s 1-hour forex chart. The pair recently surged past the resistance around the 1.6600 major psychological level then zoomed up to a high of 1.6815 before retreating. Using the handy-dandy Fib tool on the latest swing low and high shows that the 50% Fib is close to the former resistance area and now seems to be keeping losses at bay. If this area continues to hold as support, EUR/NZD might eventually resume its climb and test the previous highs. Stochastic is already climbing from the oversold region anyway, indicating that euro bulls are ready to charge, while the 100 SMA is above the 200 SMA, signaling that the uptrend could continue.
Reversal alert! AUD/JPY seems tired from its recent climb and might be heading downhill soon, as a double top pattern is forming on its 1-hour forex time frame. The pair has failed in its last two attempts to break past the 92.50 minor psychological resistance but has yet to test the neckline support around 91.00. A break below this level could confirm that a downtrend is set to take place, possibly taking the pair lower by around 150 pips or the same height as the chart formation. Stochastic is climbing out of the oversold region for now, suggesting that buyers are about to take control of price action. In addition, the 100 SMA is still above the longer-term 200 SMA, hinting that an uptrend continuation might still be possible.
Looking for a long-term forex trend setup? Then you might wanna check out this ascending channel on EUR/CAD’s 4-hour time frame. The pair recently bounced off the top of the channel and is testing support around the mid-channel area of interest. A break below this support level could lead to a test of the channel support at the 1.3900 major psychological level. Stochastic is still pointing down, showing that sellers are currently on top of their game and suggesting that further losses could be possible. Meanwhile, the 100 SMA is treading above the 200 SMA, confirming that the longer-term uptrend could stay intact. If you’re bullish on this one, better wait for stochastic confirmation or reversal candlesticks to form on the channel support before going long!
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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.