AUD/JPY broke out to the downside of an ascending triangle with sufficient and convincing momentum, but began trading sideways when it reached the 82.90 handle. In the process, what seems to be a bearish pennant has now formed. If the pennant breaks to the downside, then the pair could potentially move lower for around 350 pips, based on the pennant and its mast. Do note that the 82.00 major psychological level is a price area with very significant market interest, however, so make sure to keep a close eye on how price reacts when or if it reaches that price level.
Forex price action on CAD/JPY looks similar to that of AUD/JPY’s. The main differences are that CAD/JPY had a downside channel breakout and that a bearish flag has formed instead of a bearish pennant, although they’re essentially the same since they’re both bearish forex patterns. Also, the bearish flag formed dead squat on a price area of interest at the 83.70 handle. The flag and its pole is about 360 pips in height, so a downside breakout may have enough momentum to move for the same amount. Do note that the pair is testing a price area of interest, though, which means that there’s also a chance that the pair will invalidate the pattern and bounce higher instead.
Don’t fancy breakout plays? Well, maybe this plain vanilla Fibonacci retracement setup for CHF/JPY will hit the spot. As y’all can see, price moved past resistance at the 114.70 handle and then used it as a launching pad to swing higher. Unfortunately, selling interest at 117.40 is very strong, so price was pushed back to the 114.70 resistance-turned-support area. And if we apply our Fibonacci tool, we can also see that the said price area sits right smack on the 50% retracement level. In addition, stochastic is now pointing up and moving away from oversold territory. The only worrying thing is that the moving averages have just crossed-over into downtrend mode. 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.