The markets haven’t been too kind to the euro over the past week or so. In fact, they’ve been selling it off at a pretty steady pace ever since excitement over QE3 died down. Looking at this pair’s 1-hour chart, it seems that we may soon get a chance to hop aboard the bear train as price is about to approach a falling trend line near the 1.2950 handle. Stochastic is already indicating overbought conditions, but if you want further confirmation, it’s best to wait for reversal candlesticks to form before getting short.
AUD/USD just found support around 1.0390 and now it looks like its on track to revisit the top of the range at 1.0500. While the market isn’t really in a particularly attractive position at the moment, waiting for price to reach the top of the range (or perhaps retest the bottom) could give birth to a solid range or breakout play. In any case, this is one pair that y’all should keep tabs on!
Rounding up today’s trio is GBP/JPY with this sexy little number. As you can see, it’s been flirting with the 126.00 handle, which is in the same area as a former resistance and the 61.8% Fib level. If you want to take your cue from the bullish divergence that has formed, look to exit around the previous high above 128.00. On the other hand, if you’re thinking of selling this baby, it might be best to wait for a convincing close below 126.00 before you get short.
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.