Who’s up for a head and shoulders play today? NZD/USD is having trouble breaking above the .6500 handle, which could be serving as a neckline for a reverse head and shoulders pattern on the 1-hour time frame. The 100 SMA has also just crossed above the 200 SMA and is adding to the pressure for an upside breakout. A break above the resistance level could open up a move to .6650. Just make sure you’re trading a breakout though, and not a fakeout. The bears could always step in especially now that Stochastic has reached the overbought zone!
Next up is an easy peasy falling channel trade on GBP/NZD. The pair is encountering resistance at the 2.2050 area, which is near a third retest of a falling channel resistance on the 1-hour chart. Not only that, but Stochastic is also flirting with an overbought signal. Think the channel will hold for another day? A short trade at current levels could make for a good trade if you place your stops above the resistance levels and aim fro last week’s lows. Meanwhile, the bulls could wait for a break above the channel if you believe that the pound is about to see more gains against the Kiwi.
I spy with my bedroom eyes a possible pullback play on Cable! GBP/USD is headed fast towards the 1.4400 levels, which is right smack in the middle of a 38.2% Fib, previous support, and 100 SMA on the 4-hour time frame. Stochastic is also currently on the bears’ side with an almost overbought signal. Will the pair reach the major psychological handle or will it go back to its bearish ways before touching the potential resistance area? Keep close tabs on this one, fellas!
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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.