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Volatility seems to be picking up lately and I’m keeping my fingers that these trends will gain more traction. I’ve got a couple of short-term pullback plays I’m keeping my eyes on.

EUR/NZD: 1-hour

EUR/NZD 1-hour Forex Chart
EUR/NZD 1-hour Forex Chart

Check out this neat rising wedge pattern forming on the 1-hour chart of EUR/NZD! Price just bounced off the resistance and is setting its sights on support around the 1.6100-1.6150 levels.

This area lines up with the 100 SMA dynamic support and a former resistance level, which means that plenty of bulls might be waiting to charge right there. This short-term moving average is also above the longer-term 200 SMA so the path of least resistance is to the upside. In other words, a bounce is more likely to happen than a breakdown.

Stochastic is still heading south, though, so sellers are on top of the game at the moment. Once this oscillator hits the oversold area and turns back up, buyers could regain the upper hand and push for another test of the wedge resistance.

AUD/JPY: 1-hour

AUD/JPY 1-hour Forex Chart
AUD/JPY 1-hour Forex Chart

AUD/JPY broke below support around the 83.00 major psychological level last week and has since dipped to 81.50. From there, the pair rebounded back to the broken support, which now seems to be holding as resistance.

Applying the handy-dandy Fib tool on the latest swing high and low on the 1-hour chart shows that the 50% retracement level coincides with this area of interest. A larger pullback could last until the 61.8% Fib, which is just below the 200 SMA.

The 100 SMA is moving below this longer-term moving average, confirming that bearish momentum is in play. Also, stochastic is heading down to show that sellers are in control of AUD/JPY price action and might take it back down to the swing low.

Forex Chart Settings:

Slow Stochastic: 14,3,3
100 SMA: Blue line
200 SMA: Red line