I know you boys and girls like to trade ’em Fibs and divergences, so I put this one up for you. The dollar bulls should take note of a possible support at USD/CAD‘s 1.0350 level as it is sitting on the 50% Fib retracement near a former resistance area. Not only that, a bullish divergence and an oversold Stochastic signal is supporting the trade idea. The 1.0600 handle might be a good target if you’re going long, but keep an eye out for a break below the rising trendline.
Am I seeing double? Not only is GBP/JPY showing a double bottom setup on the 4-hour chart, it’s also very much like the GBP/USD chart I put up yesterday! The pair seems to have found support at the 117.00 handle, and it looks like it’s heading north. But be careful, brothas! Stochastic is nearly in the overbought region. If you’re bullish for the pound for the next couple of days you can aim for the 120.50 resistance, while you can also wait for a break below 117.00 if you’re bearish on the pair.
If you’re not in the mood for swing trades, then you could probably play this Fib and trendline setup on EUR/JPY. The pair seems to have rejected the 103.00 handle, but I’m seeing a possible support at the 102.20 – 102.50 area. You could probably place a stop below the trendline support if you’re going long, while the bears can also aim for the 101.00 if the pair does break the possible support areas.
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. Check him out, playas!