Remember that USD/CAD forex range I showed y’all yesterday? Well, it looks like the area of interest around the 1.3160 level held as support, putting the pair on track to test the resistance at the 1.3310 area. Stochastic has already reached overbought area, which suggests that buyers might need to take a break soon and let the sellers take over. If that happens, price could turn upon hitting the top of the range and head back down for another test of support. If you think that dollar bulls would keep on charging and that it’s about time for a breakout to take place, better wait for a long green candle to close above the range resistance before going long.
Missed the downside break on EUR/JPY’s rising trend line? Don’t fret! You might have a chance to catch the pullback to the broken support level now that the pair is showing signs of a retracement. Using the handy-dandy Fib tool on the latest swing high and low reveals that the 61.8% level is closest to the trend line and coincides with the 200 SMA. However, the correction might be a shallow one since the pair is already showing a bearish divergence, with price forming lower highs and stochastic drawing higher highs. With that, the 38.2% Fib might keep further gains in check and force EUR/JPY to drop back to the previous lows around 132.23 or even make new ones!
Last but not least is this ascending triangle pattern forming on USD/JPY’s 1-hour forex time frame. The pair formed higher lows and just bounced off the resistance at the 121.20 area, probably gearing up for a move towards the triangle support at the 119.50 minor psychological mark. The 100 SMA is currently below the 200 SMA, indicating that more downside is possible, while stochastic is still moving towards the oversold zone so sellers might have some energy left to push USD/JPY lower. Once the oscillator starts moving up from the oversold region, however, dollar bulls might take the upper hand so y’all gotta stay on the lookout for a potential bounce off the 120.00 area of interest.
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.