Sup? If y’all can still recall, back on January 19, we wuz mainly looking to get short on the pair when it was close to that there descending channel’s resistance area at 0.8670. And back then I told y’all that if 0.8670 holds as resistance, then them bears would likely be gunning for 86.00. And wouldja look at that? The pair moved past 86.00, and we have gotten us over 140 pips since then. Yea, boi! That’s right!
I also told y’all that if bearish momentum is strong enough, then we may even get a double top pattern breakout. And that seems to be playin’ out right now, so the pair may still have enough steam, since we were and still are expecting a 250-pip down move past 86.00. However, the pair has now reached the channel’s support area. Moreover, the channel’s support area happens to sit right smack on the area of interest at 85.30. And did I mention that stochastic is already indicating oversold conditions and all that? These all point to a chance that the pair may start moving back up. Know what I’m sayin? And if that happens, then them bulls will likely be gunning for 86.00 or thereabouts. Again, the pair is still likely to continue lower, though. But whether the pair continues to slide lower or pulls back first, them bears will likely be shooting for the area of interest at 84.30 next.
Last time we took a look at EUR/NZD was on January 13. And back then, the pair was pulling back to 1.5000 in a a break-and-retest, so we wuz looking for an opportunity add to our shorts or open fresh shorts for those of ya who missed the breakout move. Also we wuz shooting for 1.4850 as our target. And, as y’all can see on that there chart, the pair did reach 1.4850, which gave us an easy 150 pips. And as y’all can also see, bearish interest is still strong since the pair tried to go lower still. However, them bulls won out in the end, and so the pair began climbing higher.
Presently, the pair is testing (again) the broken channel’s support area and bears seem well entrenched there. And if we apply our Fibonacci tool, we can see that price is at the 38.2% retracement level. These are technical arguments in favor of resistance potentially forming there and price moving back down again. Stochastic has just reached oversold territory, though, so more conservative forex traders may wanna wait because there’s a chance that the pair may climb back to 1.5000, which happens to line up nicely with the 50% retracement level. Anyhow, whether you’re waiting for a pullback to 50% or you’re just so gangsta that you just want to short right away, if them shorts win out, they’ll likely be shooting for 1.4730 next. But on the flipside, you may wanna consider bailing out or switching bias if price smashes past 1.5070 and bullish momentum is strong. Okay, that’s all for now. Just make sure to practice proper risk management, a’ight? Peace!
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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.