Time for another Kiwi bounce? NZD/JPY has just gotten rejected at the top of the range on its 1-hour forex time frame and might be headed back towards the range support somewhere around the 81.00 to 81.20 area. Stochastic is already climbing, which means that buyers are eager to push the pair higher, possibly leading to another test of the range resistance near the 83.00 major psychological level. At the same time, the short-term 100 SMA is moving above the longer-term 200 SMA, signaling that a rally could take place. If buyers are strong enough, they could even allow the pair to surge past 83.00 and climb by an additional 200 pips, which is roughly the same height as the range.
Here’s another short-term range play, this time on GBP/CAD’s 1-hour forex chart. The pair is currently testing the range resistance around the 2.0325 level and might be ready to head south soon, as stochastic is pointing down and indicating that sellers are in control. If so, price could make another test of the range support at 2.0165, which might still hold as a floor. The moving averages aren’t giving any good clues at the moment and seem to be crossing back and forth, suggesting that the sideways movement could carry on. However, if a strong breakout occurs in any direction, the resulting move could last by around 160 pips, which is the same size as the rectangle formation.
Not a fan of sideways ranges? You might like this ascending channel on USD/CHF’s 1-hour forex chart instead! This rising range pattern has been holding for more than a month already, indicating that the uptrend force is strong with this one. Price seems to be on its way up to the channel resistance near the .9900 major psychological level but is currently pulling back to the mid-channel area of interest. Stochastic is already indicating oversold conditions, which means that a bounce could take place soon, and the 100 SMA is above the 200 SMA, which confirms that the uptrend is likely to carry on. A larger pullback to the channel support or the moving averages could be possible so make sure you set a stop below the bottom of the channel if you’re planning to go 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.