Dagnabit! Tuesday’s retracement setup was a no-go since price opted to keep going down instead. But we should be happy that our directional bias was right, I guess. Even better, price has pulled back recently after getting rejected at the 1.6900 major psychological level. Price has also just bounced off the 50% Fibonacci retracement level, but it now seems to be hesitating, so the big question now is whether the downtrend will continue or not. Looking at our technical indicators, the moving averages are clearly indicating a healthy downtrend. Stochastic, meanwhile, is now pointing downwards and moving away from the overbought region, so forex traders who are bearish on the pair may be in control already.
Price broke out of a bullish flag with sufficient and convincing momentum before promptly consolidating into another (potential) bullish flag. Stochastic is already moving higher and way from oversold territory, so forex traders who are bullish on the pair may be attempting another push higher, hopefully enough to cause a breakout. The moving averages are also moving further apart, indicating that the uptrend is still healthy. And if this forex chart pattern does break, we’ll probably see a 120-pip move since that is roughly the height of the flag and its “pole.”
Price broke out of a bullish flag with sufficient and convincing momentum before promptly consolidating into another (potential) bullish flag. What was that? I already used that line? Sorry, about that, forex friends! It’s just that the 1-hour forex charts for NZD/USD and NZD/JPY look rather similar that I had a case of déjà vu. Anyhow, stochastic is also moving higher on NZD/JPY’s forex chart, and the moving averages are moving further apart as well. The height of the flag and its “pole” is also roughly around 120 pips, which is rather eerie, wouldn’t you agree? In any case, make sure to practice proper risk management should you find a trade based on this or any of the other charts, okay?
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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.AUD/CAD 1-hour Forex Chart