Looking to go buy the pound? Then check out this sexy setup I found on the 4-hour timeframe of GBP/USD. Using the Fibonacci retracement tool, it seems that we could see the pair bounce off support at the 61.8% level. See how it coincides nicely with the previous resistance area and the rising trend line? Looks pretty sweet if you ask me! But be careful! A strong break of 1.5600 could mean that GBP/USD is headin’ back down to 1.5300.
There’s also a similar setup on the 1-hour timeframe of USD/CAD if you like playing with comdolls. Connecting the pairs most recent highs, it seems that price could soon find some resistance at the falling trend line and the Fibonacci retracement levels. For those looking to buy the Loonie, I’d keep an eye on the 50% level if I were you. Reversal candlesticks around this area could hint that USD/CAD will tumble down to 1.0150. Meanwhile, a convincing close above the level may mean that the pair is on its way back up to 1.0300.
Is the dollar about to hustle some muscle? Yesterday’s candle on USD/CHF closed as a doji around the 38.2% Fib level on the daily timeframe. The Stochastic indicating oversold conditions should also give dollar bulls one more reason to be happy. For those of you not yet convinced about buying the pair, waiting for confirmation (i.e. bullish marubozu) to materialize around .9500 might be a good idea.
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.