I concluded last Thursday that the path of least resistance for that there symmetrical triangle is most likely to the downside and that the resulting selloff would last for around 700 pips. Well, we did see a downside breakout and price did move lower for around 740 pips from the breakout point at 162.20, so congratulate yourself if you were paying attention at the time. For today’s play, we’re looking for opportunities go short again since price is currently pulling back. Applying our Fibonacci tool, price seems to be respecting the 38.2% Fibonacci retracement level and stochastic is just below the overbought area. More conservative forex traders may wanna wait for a pullback to the 61.8% retracement, however, since that line up nicely with the price area of significant market interest at the 160.50 minor psychological level, and the 200 SMA may potentially act as dynamic resistance to boot.
That there is the updated chart for Wednesday’s setup for CHF/JPY. If y’all can still recall, I said at the time that I was really hesitant that price will continue going lower because price has reached the price area of very significant market interest at the 112.40 handle. And as it turns out, I was right to be worried. Also, if you were able to trade the breakout, make sure to give yourself a pat on the back for your 170 pips in the bag. Anyhow, the pair now seems to be grinding higher in a newly formed ascending channel. And as I always say, one of the most conservative ways to play an ascending channel is to look for buying opportunities near the bottom of the channel, so y’all better start looking. Stochastic is also indicating oversold conditions, which is a real confidence booster. The 200 SMA seems to be acting as dynamic resistance, however, so make sure to prepare for a potential downside channel breakout as well. I still think an up move is more likely, though.
Yesterday’s potential double top for AUD/NZD’s 1-hour forex chart is now a confirmed double top. For those who missed the breakout, worry not because price is currently gunning for the broken neckline at the 1.0730 handle, giving us a break-and-retest setup to play with. In addition, the neckline happens to line up with the 50% Fibonacci retracement level and stochastic is just about to reach overbought territory. As usual, 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