First up is a nice consolidation on EUR/USD. On the 4-hour chart the pair is consolidating at the 1.3050 handle, which is also the level where the pair spent most of its holiday week. Will the minor psychological handle hold as resistance? The overbought Stochastic signal certainly suggests so! The 1.2900 handle is a good target if you’re bearish on the pair, but you can also wait for a clean break above 1.3050 if you want to aim for the 1.3200 handle.
Next on my canvas today is a simple Fib play on USD/CAD. The pair is currently climbing from its support area just below 1.0100, but it looks like the 1.0150 handle might provide some resistance. The psychological level is right between the 61.8% and 50% Fib, and it also looks like it was a former support level. The 1.0100 area is a good profit target if you’re bearish on the pair, especially if you place your stop loss somewhere above the 61.8% Fib.
Now here’s another Fib setup you can play! EUR/JPY is consolidating at the 61.8% Fib area on the 4-hour chart, and the overbought Stochastic signal is also supporting a bearish trade idea. You could probably aim for the swing low area if you’re bearish on the pair, but you can also wait for price action to break above the 100.50 handle if you’re planning on buying the euro.
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.