First up is this simple Fibonacci play on AUD/USD. After initially bouncing off the resistance zone at the 50.0% Fib and the 1.0400 psychological level, AUD/USD is now making another run back up. Will resistance hold or will we see a test of the 61.8% Fib? Before putting up any short positions, I suggest waiting for more confirmation. Waiting for reversal candlesticks or for Stochastic to hit overbought territory would help shift the odds in your favor.
Will the falling trend line on GBP/USD hold? It has done a pretty good job so far, but pound buyers are really testing its limits right now. If you’re siding with the bulls, it might be best to wait for a clean break above the trend line before committing to a long position. On the other hand, if you’re looking to sell, you may want to play it safe and wait for further confirmation. For instance, you could wait until a reversal pattern forms or until Stochastic crosses out of overbought territory.
So much for a breakout! NZD/USD’s falling channel held like a boss as the pair found resistance around .8240. The question now is, will it revisit the bottom of the channel? It seems like the level to watch at the moment is .8100, where the Kiwi last found support. If and when price reaches that area of interest again, you can decide whether you wanna go for a breakout play or a countertrend bounce play.
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.