First up is this Fib action on USD/CAD’s 4-hour time frame. After finding resistance at the 1.3250 area, the pair headed back towards the 1.3000 psychological level. Right now it’s back near a mid-channel support, which is near the 50% Fib retracement and 100 SMA areas. Stochastic also just hit the oversold territory, which could attract more bulls into the game. If you’re looking to go long, then you could wait for a couple more candlesticks around the Fib levels and wait for Stochastic to turn higher before hitting the button.
Here’s one for the forex bears! NZD/USD just hit resistance around the .6750 area, which right smack at a falling channel resistance on the 1-hour chart. The trend line has held at least four times since mid-October, so another turn lower is still a possibility. On the other hand, the 100 and 200 SMAs are right below the current price, so the bears might take a while to get momentum. A short around the current levels with a stop above recent highs could present a juicy trade setup if you aim for the bottom of the channel. If you’re buying the pair though, then you might want to wait for an upside breakout and an SMA cross for confirmation.
Can’t get enough of trends? Here’s another one for ya! GBP/JPY is having trouble breaking above its previous highs as it found resistance around the 186.70 area. It also doesn’t help the bulls that a bearish divergence has popped up since then. If you’re still into the pair’s uptrend, then waiting for the divergence to play out might be a good idea. The mid-channel levels and the areas around the 100 and 200 SMAs are possible hot zones for long trades. If you’re one of them bears though, then a break below the SMAs or the channel could make strong cases for a downside breakout.
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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.