On the search for a breakout trade? Look no further than EUR/GBP! As you can see on the 4-hour timeframe, the pair has been making higher lows and lower highs, forming a symmetrical triangle. Currently, price is testing resistance at the falling trend line. Will it hold? Stochastic indicates that it would, given that it is in the overbought area. But be careful! A strong close above .8150 could mean that the pair could soon be back up at .8200.
Next up, let’s zoom in to the daily timeframe of USD/JPY. Price is now trading around its previous high. If you’re thinking about buying the yen, this could be the right time. Take note that Stochastic also indicates a bearish divergence. So what’s it gonna be? Just don’t get too excited though. Be on your toes for strong bullish candlesticks as they could indicate that the pair is on its way up to 85.00.
Finally, feast your eyes on this! Last Friday’s candle on EUR/USD closed strongly above its previous highs. Has resistance been broken? Maybe. If there are still enough bulls in the market we could see the pair rally past 1.3200 in no time. But if there are not, EUR/USD could soon tumble back down to 1.3100 and test the handle for support.
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.