EUR/NZD was able to break past the support area at the 1.6300 major psychological level but encountered more buyers at 1.6100, the next major psychological level. The buyers were able to overwhelm the sellers, so much so that the pair began pulling back, giving us a textbook break-and-retest setup to play with. Using our Fibonacci tool, we can see that the 1.6300 level sits right smack on the 50% retracement level, so that’s the most conservative price area for price to pullback to. Stochastic is already indicating overbought conditions, though, and price happens to be testing the 38.2% retracement level, but going short here is only recommended for more aggressive forex traders.
The pair has been grudgingly grinding higher while inside a rather messy-looking ascending channel. Price is currently near the top of the channel, so more conservative traders may wanna sit this one out for a while. For the more aggressive traders out there, just know that stochastic is already indicating oversold conditions. Also, the pair is approaching the 1.0950 minor psychological level, which is a price area with very significant market interest, even on the higher time frames, so there’s a good chance that price may react.
EUR/GBP broke out of a rectangle pattern but found support at the 0.7890 handle and began trading sideways. If the price will consolidate for a while, then the most likely resistance area is at 0.7930, which will give us a rather tight 40-pip trading range or rectangle. If the rectangle will break, the most likely direction will be to the downside since the moving averages are now in downtrend mode while stochastic is already pointing down and moving away from overbought territory. Anyhow, 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.