Looks like this range is still intact, fellas! AUD/NZD has been pacing back and forth between support around 1.0970 and resistance at the 1.1300 major psychological mark. Price is currently testing the bottom of the range, which appears to be holding as support, while stochastic is suggesting that a bounce back to the top is in order. The 100 SMA is also above the longer-term 200 SMA, indicating that the path of least resistance is to the upside. However, a return in selling pressure could still spur a break of support, possibly pushing the pair down by an additional 330 pips or the same height as the range. Just make sure you set your sell stop order below the recent lows if you’re looking to short or wait for additional candlestick confirmation.
Reversal alert! GBP/CAD seems to be tired from its recent climb, as the pair formed a head and shoulders pattern on its 4-hour forex chart. Price is currently testing the neckline around the 2.0200 major psychological support and a break below this area could confirm that a downtrend is underway. The moving averages just made a downward crossover, hinting that a reversal might take place sooner or later, while stochastic is still on the move up. Once the indicator reaches the overbought zone and turns lower, sellers could come out to play and start a selloff of around 750 pips, which is the same height as the chart pattern. Better keep your eyes peeled for a long red candle closing below the neckline support if you’re hoping to catch the breakdown!
Here’s another potential reversal setup for the euro traders out there! EUR/USD is in the middle of forming a double bottom formation on its 1-hour forex chart, suggesting that the short-term downtrend might be over and that a climb might be in the works. Price has yet to test the neckline around the 1.1300 major psychological level before heading further north, possibly by around 200 pips or the same size as the chart formation. The 100 SMA is still below the 200 SMA, though, which means that the path of least resistance is to the downside. In addition, stochastic is already indicating overbought conditions, which means that the drop might resume. If the long-term SMA continues to keep gains in check, price could head back to the previous lows at the 1.1100 handle.
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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.