Retracement alert! Cable is hitting the 1.4200 major psychological handle, which is right around a 50% Fib and previous support level on the 4-hour time frame. Stochastic is also on the bulls’ side this time with an overbought signal. Will the pair go back to its new lows, or will the bulls push it to its previous highs? Read up on using Fibs to enter trends if you’re not too sure on how you will approach this setup!
Here’s another one for trend traders! EUR/GBP is having trouble breaking below the .7700 mark, which is right smack at a 200 SMA support on the 4-hour chart. Easy peasy, right? Not so fast. A long trade at current levels is a great idea if you think that the forex pair would bounce from the 200 SMA support. On the other hand, you could also wait for a downside breakout if you don’t think that the euro is headed lower against the pound.
Remember that descending triangle that we checked out at a while back? Well, it looks like AUD/NZD has broken above the trend line after all, and we might be looking at a resistance-turned-support scenario. Stochastic hasn’t quite reached the oversold territory, so you’ll have some more time to assess if we’re looking at a possible bounce. However this forex setup plays out, make sure you keep your stops loose and your trading plans tight!
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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.