Did you miss the piptastic setup that I pointed out on USD/CAD just a few days ago? Well, you’re in luck because you may have another chance to play it! The pair is now back in the area of 1.0250 after bouncing off the channel’s rising support at the start of the week. If you think the rising channel will remain intact, look to short near the top. This could turn out to be a very profitable trade since there seems to be plenty of room for the pair to fall. But keep in mind that it entails a bit of risk since it’s a countertrend play. Be smart about your risk management so you don’t get burned!
Thar she blows! I’m talking about that major support level on Cable, of course! Pound bears blasted through 1.5900 yesterday, forging a fresh low for the month. Could this be the start of a new trend? If the pair does continue south, the next logical support area appears to be 1.5700, as it has acted as an area of interest in the past. Now, if you’re not quite ready to commit to selling Cable yet, you should probably wait for a pullback before getting on the bearish bandwagon.
Rounding up today’s trio, we have USD/JPY! The doji that formed on the daily chart yesterday is looking mighty tempting. No, I’m not saying that because it’s got long legs… although I do love me some long legs. I’m saying that because it formed in a critical area – right on the 61.8% Fibonacci retracement level and right above the 77.00 major psychological handle! A solid bounce off this level could result in a bull run all the way to 78.00 or even 79.00. On the other hand, if today’s daily candlestick closes below 77.00, it could be a sign that USD/JPY is headed back to 76.00.
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.