Bounce or break? What’s your call on EUR/USD as it tests the rising trend line for support? If you’re feeling bullish for the pair, you may want to wait for reversal candlesticks to materialize around the area which could signal that EUR/USD will continue trading higher. On the other hand, a strong close below yesterday’s low at 1.3204 could be a sign that the pair is on its way back down to 1.3100.
If you think divergences are sexy, you’re in for a treat with this setup on GBP/JPY! A bearish divergence has materialized on the 1-hour time frame with price making lower highs while Stochastic is making higher highs. If you’re feeling bearish and think that the pair will soon drop to 129.50, seeing that the pair is trading at the 38.2% Fibonacci level may also tickle your fancy. However, don’t get too excited just yet! There may still be enough bulls in the market to push the pair to 130.50 and test the previous support area around the 50% Fibonacci level. Heck, there may even be enough of them to push GBP/JPY back above 131.50!
There’s also a similar setup on AUD/JPY for y’all who prefer trading comdolls. Price has pulled back to a previous support area around the 38.2% Fib level. However, Stochastic hasn’t quite reached the overbought territory just yet. So, once again, don’t get too giddy shorting! If the pair closes strongly above yesterday’s high around 83.30, we could see AUD/JPY hustle all the way back up to 84.50!
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.