Let’s start with that there break-and-retest setup on EUR/NZD’s 1-hour forex chart. As y’all can see, price broke past the resistance area around the 1.6200 major psychological level… only to be repelled when it reached the 1.6090 handle. Price then pulled back to the 1.6200 level and that’s where price has been milling about for the last couple of hours. And if we apply the Fibonacci tool, we can also see that 1.6200 site right smack on the 38.2% retracement level, which gives us another boost of confidence that 1.6200 will hold as resistance. And looking at our technical indicators, we can see that the moving averages have already crossed over into downtrend mode, with the 100 SMA acting as dynamic resistance to boot. Stochastic is also pointing down and moving away from overbought territory, so forex traders who are bearish on the pair may already be nibbling.
NZD/CAD broke past support around the 0.8690 handle but was rejected when it reached the 0.8590. The rejection was so intense that price just blew right past the price area of interest around the 0.8690 handle. However, the bullish momentum evaporated and the pair was forced down again when price found resistance at 0.8770. Forex traders bullish on the pair consolidated their strength just above the 0.8690 handle and tried to break past resistance for the the second time and failed yet again, forming that there potential double top. Presently, price is making its way down to potentially test the 0.8690 handle. Do note that price needs to break past 0.8690 to confirm the forex chart pattern. Also, note that that pattern only has a height of around 80 pips, so the resulting selloff from a breakout could potentially last for the same amount.
That trading range or rectangle that we identified on NZD/JPY’s 1-hour forex time frame from earlier worked out great since price began moving down. Currently, price is hesitating at the 80.00 major psychological level, so I decided to take a look if another trading opportunity was available and I found that there symmetrical-ish triangle. A symmetrical triangle can potentially break in either direction, but looking at our technical indicators, we can see that see that stochastic is already indicating oversold conditions. The moving averages, meanwhile, have just crossed-over into uptrend mode, but they’re essentially oscillating, so they ain’t really helping much. Anyhow, just know that the forex chart pattern has a height of around 150 pips, so the resulting rally or selloff may last for the roughly the same number of pips. In any case, just 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