We’re starting off with a nice and simple rising channel play on EUR/JPY. The pair encountered resistance just above the mid-channel line, which is also near the 100 SMA levels on the 1-hour time frame. Not only that, but Stochastic is also on the overbought territory. You can aim for the channel’s lows if you like trading countertrend trades but you could also wait for a retest of the channel’s support levels if you’re not comfortable trading against the trend. Countertrend trading isn’t for everyone, after all.
Here’s a retracement that my four-year old niece would be able to spot in her nap! GBP/AUD is lollygagging at the 1.9030 levels, which is right smack at a 50% Fib on the 1-hour time frame. What’s more, the area had also served as a support level early this week. A short trade at current levels could earn you some pips if you believe that the pound will return to its previous lows. On the other hand, you could also wait for a break above said resistance lines if you’re one of them pound bulls or Aussie bears.
Last one up for today is another rising channel setup, this time on NZD/USD’s 4-hour chart. The pair fell sharply during the early Asian session and it looks like it might be stalling around the .6600 major psychological levels. This isn’t really surprising since it’s just above the rising channel and 200 SMA support. What do you think? Will the Kiwi show some pullback, or will the bears drag the pair all the way to the .6575 area?
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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.