To kick off our charts I have a EUR/USD setup on the 4-hour time frame. After bouncing off the 1.3600 major psychological handle yesterday, it looks like EUR/USD is on its way up. And why not? A rising trendline is supporting the euro bulls at the moment, and Stochastic is also waving a buy signal in the oversold region. If you’re bullish on the pair you can aim for the 1.3900 handle, but the bears can also wait for a break of the 1.3600 support before pouncing.
Who says you can’t trade the franc? On USD/CHF‘s 4-hour chart I’m seeing a descending channel in the making, as well as a bearish divergence near the .8850 minor psychological handle. Not only that, Stochastic is also in the overbought zone! If you’re shorting the pair you can probably place your stop above the channel and aim for .8700, but you can also wait for a break above .8900 if you’re bullish on the dollar.
Last up for today is another descending channel setup, but this time we’re jumping in the downtrend instead of predicting it. The pair dropped sharply a couple of minutes ago and now it’s hanging around the middle of the channel. Will EUR/AUD find support at 1.3350 or will it drop straight to 1.3250? Stochastic hasn’t reached the oversold region yet so it’s still a coin toss, but you can place tight stop losses if you’re planning on jumping in on the move.
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!