First up for today is a simple rising channel play on GBP/NZD. The pair is finding support at the 2.2100 handle, which is right around a third test of a rising channel on the 1-hour time frame. Not only that, but Stochastic is also flirting with the oversold territory. Is it time for GBP/NZD to see another bounce? A stop just below the trend line could get you decent pips if you think that the pound is in for more gains against the Kiwi. On the other hand, you could also wait for a downside break if you believe that the pair’s uptrend has already maxed its potential.
Breakout alert! After breaking above a tight range early last week, EUR/CHF has since popped up and encountered resistance just below 1.1000. What makes this setup interesting is that it’s currently forming what looks like a bullish pennant on the 1-hour chart. If you’ve read your School of Pipsology, then you’ll know that pennants tend to signal trend continuation for currency pairs. Not only that, but pennant breakouts also tend to be as strong as the move before its consolidation. The cherry on top of this setup sundae is a potential support from the 100 and 200 SMA on the chart. Think we’ll see a breakout soon? Make sure you’ve read about trading breakouts if you haven’t done it yet!
Step up your breakout game because here’s another potential breakout for ya! This time we’re looking NZD/USD’s 1-hour chart. Like in EUR/CHF, NZD/USD has consolidated into a possible pennant after a strong trend AND is being supported by the 100 and 200 SMAs on the chart. Unlike in EUR/CHF though, we’re looking at a possible downside break this time. If you haven’t practiced trading pennants yet, then you might want to put on positions after an actual breakout. You might lose some pips, but you’ll have better chances at seeing a breakout. In any case, you’ll need a trading plan if you’re planning on trading this one today.
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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.