Anyone gutsy enough to take a quick countertrend trade for USD/JPY? The pair seems to have found resistance at the top of the rising channel on its 1-hour time frame and may be headed back for support around the 115.50-116.00 levels. If you’re very bullish on this pair, you could just wait for an actual test of the channel bottom and aim for the top around 117.00 instead. With the strong buying pressure on USD/JPY though, there’s a good chance that the channel resistance might break sooner or later so make sure you’re ready to catch that move as well!
Aha! Check out these neat technical signals lining up for GBP/USD! After that steady selloff recently, the pair could be in for a correction as bears might need to take a quick break. Using the Fibonacci retracement tool on the latest swing high and low reveals that the 61.8% level lines up with a former support area around the 1.5800 major psychological mark. A higher retracement could lead to a test of the falling trend line, which happens to coincide with the 200 SMA. Stochastic is already moving down from the overbought zone though, indicating that selling momentum is building up once more and that the pullback might be a shallow one.
Here’s another potential countertrend forex play, this time on USD/CAD’s 1-hour time frame. The pair is sitting at the bottom of the falling trend channel, still deciding whether to bounce or make a break for it. Stochastic is suggesting that a move back to the top of the channel is likely, as the oscillator is climbing out of the oversold area. If the 1.1250 minor psychological support around the channel bottom holds, USD/CAD could head back to the top around 1.1350 or at least until the middle of the range near 1.1300. On the other hand, a downside break would indicate that more losses are in the cards and that USD/CAD could test the next support area around 1.1100.
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.