After consolidating inside a symmetrical triangle forex pattern for nearly three months, EUR/JPY finally picked a direction! The pair is bound to head further south, as price made a strong break below the triangle support around the 135.00 major psychological level. The 100 SMA is still above the 200 SMA while stochastic just reached the oversold area, indicating that euro bears might need to take it easy from here. If so, price could still pull back to the broken triangle support for a quick retest before heading any lower. Note that the triangle is approximately 700 pips tall, which means that the resulting downtrend could last by the same number of pips.
EUR/CAD also made a neat downside break, escaping from the descending triangle chart pattern on its 4-hour forex chart. The pair could be in for more losses from here, especially since the 100 SMA is moving farther below the longer-term 200 SMA, indicating that selling pressure is building up. Stochastic just dipped into the oversold zone, though, which means that sellers might have to take a break soon. In that case, price could still retreat to the broken triangle support around the 1.4660 level to draw more euro bears in the game. The pair could still have a long way to go on its southbound route, as the chart pattern is around 800 pips in height, which suggests that price could fall by roughly the same amount as well.
Last but most certainly not least is this long-term triangle breakdown on EUR/USD’s daily forex chart. Price had been stuck inside an ascending triangle since the beginning of this year and is starting to break free, thanks to the dovish ECB statement. Stochastic is still pointing down, which means that sellers have plenty of energy to push for more declines. Heck, the pair might have its sights set on the yearly lows around 1.0500 or much lower! After all, the triangle is approximately a thousand pips tall so the long-term selloff might last by that much. Be careful, though, as the moving averages made an upward crossover, which hints that a large bounce might still be possible.
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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.