Well, well, well… It looks like the EUR/USD bulls have finally managed to stop the bleeding and prevent further losses. But with the pair trading within a very tight horizontal range, are the bears simply taking a break before pushing the pair down again? Since it is still unclear where the pair will go next, waiting for candlestick confirmation is a good idea. If you’re part of the bull camp, a close above 1.2750 is a good indication of a reversal. On the other hand, if you’re bearish on the pair, wait for price to significantly break and close below former low.
If you’re waiting for a chance to profit from dollar strength, then this could be the setup for you! USD/CHF has been climbing inside a rising channel for almost a couple of days already, as it hit resistance at the top yesterday. Price appears poised to test the bottom of the channel, right around the .9450 minor psychological support. Stochastic is currently on middle ground and pointing downwards, suggesting that dollar bears could take the pair much lower. With that, keep an eye out for potential breakouts as well!
I know some of y’all might get carried away shorting GBP/JPY, but don’t get too excited! If you zoom out to the daily timeframe, you’ll see that the pair is now trading around a previous resistance area which coincides nicely with the 50% Fibonacci retracement level. So be careful! Pound bulls might be waiting around 125.00 to hustle the pair back above 130.00!
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.