After breaking (and retesting) a falling trend line AND the 100 and 200 SMAs earlier this week, EUR/AUD looks stuck around the 1.4000 major psychological area. Not really surprising since the level has been an area of interest for euro bulls and bears in the past. What makes it interesting this time around is that it’s forming what looks like a double top on the 4-hour time frame. Not only that, but there’s also a divergence poppin’ up on the chart! Think the euro will soon go back to its downtrend? Or are the bulls just getting a breather before pushing the pair to new weekly highs? Watch this one closely, fellas!
Here’s one for breakout traders out there! GBP/NZD is nearing the end of a bearish wedge pattern, which is right smack at a falling trend line AND 100 and 200 SMAs on the daily chart. If you’ve read your School of Pipsology, then you’ll know that wedges like these could either serve as reversal or continuation patterns. Shorting at current prices could get you a sweet deal if you think that the pound will extend its downtrend this week. But if you think that we’re looking at an upside breakout in the making, then you might want to bust out your breakout strategies and prepare for a possible upside break. But whichever side you’re on, make sure you keep your risk management tight, aight?
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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.