Careful, Aussie bears! AUD/JPY just formed a double bottom pattern on its 4-hour forex chart, indicating that the recent downtrend might already be over. Price has yet to break past the neckline resistance at the 92.00 major psychological level before confirming the potential reversal. If that happens, the pair could climb by an additional 250 pips, which is the same size as the chart formation. However, breaking past the neckline could be a bit of a challenge for Aussie bulls since this lines up with the 200 SMA, which has served as a dynamic inflection point in the past. In addition, the 100 SMA is below the 200 SMA while stochastic is reflecting overbought conditions, both suggesting that the downtrend could resume sooner or later.
Here’s another neat chart pattern you gotta take a look at. USD/JPY has formed higher lows and found resistance around the 124.50 minor psychological mark, creating an ascending triangle formation on its 1-hour forex time frame. After bouncing off the triangle support, the pair looks poised to test the resistance once more. Stochastic seems to be signaling that the top of the triangle could keep gains in check, as the indicator is already in the overbought zone. Meanwhile, the 100 SMA just crossed above the longer-term 200 SMA, hinting that buying pressure is building up and that an upside break could be possible. If that happens, USD/JPY could climb by around 150 pips or the same height as the triangle pattern.
Last but definitely not least is this break-and-retest setup on AUD/USD’s 1-hour forex chart. The pair recently made a strong rally past the .7350 minor psychological level then zoomed up to a high of .7430 before retreating. Using the Fib tool on the latest swing low and high shows that the 50% Fibonacci retracement level lines up with the broken resistance, which has also happened to hold as a support area earlier last month. At the same time, stochastic just reached the oversold region, which means that sellers are getting exhausted. The 100 SMA also looks ready to cross above the 200 SMA to indicate that an uptrend is about to take place.
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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.