Where to now, NZD/JPY? The pair has formed higher lows and lower highs, creating a symmetrical triangle pattern on its 1-hour forex chart. Price is now gearing up for a test of the triangle support around the 82.00 major psychological mark, which might be strong enough to keep losses in check and trigger a bounce back to the top. After all, stochastic is already indicating oversold conditions so sellers might need to take it easy from here and let Kiwi bulls take over. In addition, the 100 SMA is above the longer-term 200 SMA, suggesting that the path of least resistance is to the upside. If a breakdown takes place, though, NZD/JPY could fally by an additional 300 pips or the same height as the triangle formation.
Here’s another consolidation pattern on a comdoll chart! As you can see on AUD/USD’s 4-hour forex time frame, a rising wedge pattern is forming and price is already testing the resistance. Will it go for a bounce or a break? Stochastic is on the move down, hinting that sellers are about to gain the upper hand and push price back down to the bottom of the formation around the .7200 major psychological level. The 100 SMA appears to be gearing up for a downward crossover, confirming that Aussie bears are getting stronger. However, if bulls refuse to give way, an upside breakout from the wedge resistance at the .7350 minor psychological level might still be possible. Watch out for a potential 400-pip climb in case that happens!
Yep, this one’s still lookin’ pretty solid, forex fellas! EUR/GBP is lingering at the top of its long-term range visible on the daily time frame, probably deciding whether to go for an upside breakout or to head back to the bottom. Technical indicators are giving mixed clues, with stochastic looking poised to move south and the moving averages showing a fresh upward crossover. If you’re bullish on this one, better wait for a long green candle to close above the .7400-.7450 levels before hopping in. And if you’re bearish, it wouldn’t hurt to hold out for some reversal candlesticks or a bit more downside momentum as confirmation. Just make sure you set your stop losses properly when trading this one!
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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.