How long can USD/JPY’s rally last? By the looks of its 4-hour time frame, it seems that the pair’s rally will be over pretty soon. USD/JPY seems to be having trouble breaking beyond the 82.50 minor psychological resistance as it formed a double top pattern right there. But before you consider shorting this pair, wait for it to break below the neckline just below the 82.00 mark. Be careful because stochastic is about to reach the oversold zone, too!
As Happy Pip always says, USD/CAD sure loves to move sideways! Right now, the pair is stuck in a range between the .9950 area and the .9915 level. The pair just hit the top of the range while stochastic crossed down from the overbought area, hinting at a potential drop back to .9915. If you’re planning to take this short-term setup, make sure you set your stops above the .9950 minor psychological resistance!
Check out this potential divergence play on EUR/JPY! The pair has been climbing for the past three weeks but it looks like euro bears could pounce sooner or later. The pair made higher highs but stochastic made lower highs, creating a bearish divergence on the 4-hour time frame. Don’t forget to check if the setup meets the 9 Rules for Trading Divergences before shorting this one!
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.