My, how things change quickly! Just a few months ago, EUR/JPY was trading around 110.00, but now, the pair is chillin’ way below the 100.00 mark! There are some signs though, that EUR/JPY’s recent downtrend may be coming to a pause. First, bullish divergence has formed, as price has made lower lows while Stochastic has posted higher lows. Secondly, a bullish green candle has formed after Monday’s doji. If you ask me though, I’d probably wait for another bullish green candle and for Stochastic to crossover out of oversold conditions before betting my whip on this trade.
Next up is a sexy descending channel on GBP/JPY. The pair bounced off the top resistance around 118.20 yesterday, and with Stochastic crossing over to the downside, we could see selling pressure continue to kick in. We may see another retest of the 118.00 handle before this pair heads back south. When it does, make sure you’ve sobered up and have a trading plan in place before pulling the trigger!
Lastly, let’s hit up that Cable chart that I pointed out last week. GBP/USD is still partyin’ around the 1.5300-1.5350 support zone, and looks like it could be headed in either direction. My advice is to wait for a solid marubozu candle to close either below support at 1.5300 or above 1.5400. This would give a clearer sign whether support has been broken or if its holding more strongly than ever.
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.