Here’s a simple trend play for ya. USD/CAD hasn’t broken its rising channel on the 1-hour chart and it looks like it’s currently lollygagging somewhere in the middle of the setup. If you’re one of them trend surfers like Pip Surfer or Huck, then your best bet is waiting for another retest of the 100 SMA with stops below the 200 SMA and profit targets aimed somewhere at the top of the channel. It also wouldn’t hurt if Stochastic revisits the oversold region by then. This is a pretty tight channel, so make sure you got your risk managed and your trading journals filled with plans if you’re trading this one!
Breakout alert! After testing the 1.0085 area twice last week and once this week, USD/CHF bulls look like they’ve hustled enough muscle to break the resistance level. Will it lead to a breakout though? One look on the 1-hour chart tells us that the “breakout” has been a slow grind rather than a burst of orders while Stochastic is also flirting at the overbought territory. A stop below the trend line and SMAs could get you some pips if you think that we’re seeing the start of an upside breakout while a short with stops above major and minor psychological levels is also a good idea if you think that USD/CHF bears are about to step in.
Last one up for today is a trend alert for Kiwi traders. NZD/USD has been on a falling channel since the start of October and it doesn’t look like the bears will hand over the reins anytime soon. In fact, the crossover on the 4-hour charts hints that the downtrend is just getting started for the pair. Stochastic is currently in the oversold region, so forex bears still have room to wait for better entry points. Maybe a test of the 100 or 200 SMA? The mid-channel line wouldn’t be so bad either. Read up on swing trading if you haven’t tried trading trends on time frames higher than the 1-hour chart!
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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.