If you’re looking to grab quick pips, here’s a potential scalp forex play that you might like. EUR/GBP has been pacing back and forth between support at the .7175 level and resistance at .7225, creating a 50-pip range visible on its 1-hour chart. The pair just bounced off the bottom of the range but looks poised to make another test of support, as stochastic is moving lower. Make sure you set your stops tight if you’re planning on trading the range and be ready for a breakout in either direction!
Careful, Kiwi bulls! NZD/USD is currently sitting at the top of the rising wedge pattern forming on its 4-hour forex chart and may head back to the bottom of the formation near the .7600 major psychological support. Stochastic is on its way up though, which means that buyers are still in control and could continue to push for more gains. If an upside breakout takes place, the pair could climb by an additional 500 pips, which is around the same height as the chart pattern. Better review our lesson on How to Trade Breakouts if you’re taking that route.
Here’s another setup that range traders might like! This time I’m lookin’ at a potential longer-term play on GBP/USD’s 4-hour forex chart. The pair is still testing the resistance at the 1.5000 major psychological level and may be due to head south, possibly until the bottom of the range at the 1.4600 major psychological mark. Stochastic is moving higher though, suggesting that pound bulls are still going strong and may have enough energy to charge past the 1.5000 handle. Waiting for reversal candlesticks or confirmation from stochastic could provide more clues for this one!
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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.