Let’s kick off Hump Day with a look at one of my favorite pairs to trade: GBP/USD! After testing the 61.8% Fibonacci level for five straight days, Cable has finally decided to pick a direction. It moved lower yesterday, suggesting that the bears have beaten the bulls. With the Stochastic showing that conditions are overbought, we could see the pair go even lower, possibly towards the former low at 1.4800.
Speaking of Fibs, a nice retracement play has formed on USD/JPY. Now, price isn’t pulling back yet but with the Stochastic moving out of oversold territory and moving higher, we could see the bulls act soon. If you’re part of the bear camp, you could get an opportunity to sell at a better level once the pair rises to the 38.2% Fibonacci retracement level.
Since I’m a homie of the people, I won’t leave the range traders hanging. As you can see, EUR/USD has been stuck within a horizontal channel, finding a top at 1.3300 and support at 1.3250. With price moving sideways, it might be a good idea to focus on bounce trades. Look for potential sell setups at 1.3300 and buy trades at 1.3250. However, in the event that support at 1.3250 breaks, price could fall back down to the key level at 1.3165.
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.