Let’s start off with a nice and simple trend play on GBP/USD. The pair is currently testing a rising trend line, which is just above a 100 SMA on the 1-hour time frame. A long trade at current levels could get you some quick pips if you think that Cable will test its previous highs. Just make sure you set your stops below the support levels!
After finding support at the 1.3275 area, USD/CAD is now back up to the 1.3400 major pyschological levels, which is near last week’s area of interest. Think the bears will bite and drag the pair back down? Or will the bulls gain momentum and push USD/CAD back towards the 1.3500 levels? Stochastic is currently on the bears’ side with an overbought signal, so you might want to wait for some momentum before you make any bullish bets. Meanwhile, the bears can wait for a couple of bearish candlesticks before making any short trades.
EUR/CAD is riding a small rising channel on the 1-hour chart! What makes this setup interesting is that it looks like the 100 SMA is about to cross above the 200 SMA. If you’ve read the School of Pipsology, then you’ll know that we could be looking at an uptrend in the making. The pair isn’t in any good place for a long or short trade, so waiting it out is the best play for now. The bulls can wait for a retest of the channel support, while countertrend traders could wait for a touch of the channel’s resistance before making any short trades.
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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.