First up, let’s start with Tom the bartender’s favorite pair, EUR/USD! With all the choppiness in the markets, EUR/USD has began to consolidate into a symmetrical triangle. Currently, the pair is testing the rising support trend line, with Stochastic just about to enter oversold conditions. I’ve got a feeling that the support line will hold, but the question is for how long? If you’re planning to trade the break of the triangle, I’d wait for a candlestick that either closes below 1.4300 or above 1.4400 before making my move.
Finally! After weeks of consolidation, Cable has broken out of its range! The pair had been trading within a range between 1.6470 and 1.6240, before breaking to as low as 1.6120 yesterday. Based on the height of the range, GBP/USD may be gunning for the 1.6000 handle. Watch out, as Stochastic is indicating oversold conditions. We may see the pair pullback a bit before gearing up for another strong move down in the coming days.
Hot damn! The yen is on FIRE! USD/JPY is right back where it was last week before the BOJ’s intervention! However, there are some signs that support at 76.40 will hold. First, Stochastic has crossed over out of oversold territory, indicating that buyers are coming back to play. Second, a morning star candlestick formation formed right smack at the support level. If you want more confirmation, it might be best to wait for a couple more bullish green candles before going long.
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. Check him out, playas!