Retracement alert! After falling to the 78.00 handle, AUD/JPY has since pulled back and is now trading around the 80.00 psychological handle. What makes this setup interesting is that the level is near a falling trend line, previous support, and 61.8% Fib on the 1-hour time frame. And let’s not forget the 100 SMA resistance lurking just above the trend line! The cherry on top of this setup is the overbought Stochastic signal. Think the Aussie is in for more losses? A short at current levels could get you decent pips if you aim for the pair’s previous lows, but you could also wait for downside momentum if you aren’t too sure about buying the yen today.
Another day, another interesting setup from EUR/GBP! While we were looking at a possible resistance-turned-support scenario, the pair has been forming a rising trend line on the 1-hour chart. Right now it’s headed for the .7800 major psychological handle, which lines up with a rising trend line and 100 SMA on the 1-hour time frame. Not only that, but Stochastic is almost at the oversold territory, too! A long trade near the trend line is a good idea, especially if you place your stops below the trend line support. Just make sure you make room for contingencies in your trading plans in case the pair breaks lower!
Breakout alert! Cable’s 100 and 200 SMAs have just crossed to the downside, almost in time for the pair to hit a falling trend line that makes up a descending triangle. With Stochastic also nearly in the overbought territory, chances are that GBP/USD could see a bit more losses. Watch out for the 1.4400 major psychological handle though, as we could be looking at a resistance-turned-support scenario. Think Cable will see a descending triangle breakout? Read up on trading triangles from the School of Pipsology if you haven’t done it yet!
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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.