After flirting around 96.70 a few days ago, it looks like USD/JPY is ready for some Fib lovin’! As you can see, price is starting to make its way lower, possibly towards the 94.00 major psychological level. If the level is reached, we could see price encounter significant support, as the level lines up nicely with the 50% Fib and a broken resistance level.
GBP/USD, too, is pulling back. After testing the 1.4850 level, the pair is now heading to 1.5000, which is a very important behavioral level. Big institutions tend to trade these levels, so it’s a good idea to keep an eye on them too. What makes 1.5000 even more significant is that it coincides beautifully with the 50% Fib and a broken support level. Remember, whenever price passes through a strong support level, that level normally becomes resistance.
If you’re not a fan of Fib plays, then why don’t you check out the descending triangle formation on EUR/CAD? Price traded within the pattern for quite some time, but now it looks like it’s about to break. Though it wasn’t able to completely go below the 1.3300 level, price already broke through the bottom of the formation two times. Just one more big push and 1.3300 could give way and open the way for more bears to jump in.
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.