Missed the double top breakdown on EUR/JPY? Don’t fret! You might have another shot at hopping in the downtrend, as a break-and-retest play is showing up on its 1-hour forex chart. Using the handy-dandy Fib tool on the latest swing high and low shows that the 50% Fibonacci retracement level coincides with the broken neckline support, which might now hold as resistance. The 100 SMA is below the 200 SMA while stochastic is starting to head down from the overbought zone, indicating that sellers are on top of their game. If euro bears are eager to push the price back down, the 38.2% Fib near the 135.00 major psychological level might already keep further gains in check. But if the pair is in the mood for a larger correction, it could still pull up to the 61.8% Fib near the 136.00 handle.
Told y’all a breakdown was bound to take place for NZD/JPY! After consolidating inside a symmetrical triangle pattern for quite some time, the pair finally picked a direction and broke below support. This suggests that the pair is in for a longer-term selloff, possibly to the tune of 500 pips or the same height as the triangle formation. The 100 SMA just crossed below the 200 SMA, confirming that further losses are likely, but the pair seems to be pulling up from its recent dive. Price could still retest the broken triangle support around the 76.00 major psychological level or the moving averages before resuming its drop. Stochastic is on the move up for now, which means that Kiwi bears are taking a break.
Here’s another fresh triangle breakout on a yen pair! CAD/JPY also picked the southbound route after cruising inside an ascending triangle pattern on its 1-hour forex chart. This means that price could be in for more declines, possibly by around 350-400 pips or the same size as the chart formation. The moving averages support this direction, as the short-term SMA is starting to cross below the longer-term 200 SMA. However, stochastic is moving up from the oversold zone, hinting that Loonie bears are feeling exhausted. This could spur a pullback to the broken triangle support near the 91.00 mark and the moving averages, which might hold as dynamic resistance levels.
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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.