I spy with my cool, bedroom eyes a resistance-turned-support scenario! AUD/USD is having trouble breaking above the .7600 area, which is right smack at a broken rising trend line on the 1-hour time frame. Not only that, but Stochastic is also sitting on the overbought territory. Will the Aussie go back to its uptrend, or will the bears defend the broken trend line area? A short trade at current levels is a good idea if you think that the Aussie will fall back to its weekly lows. Of course, you could also wait for a break above last week’s highs if you’re planning on trading a long Aussie trade.
Here’s one for countertrend traders! CAD/JPY is about to hit the 87.00 major psychological handle, which is a rising channel resistance for the pair. Stochastic is already in the overbought region, so the bears might want to watch out in case the pair doesn’t even go up to the 87.00 handle. Be careful in trading countertrend trades though, as it’s not for everyone. Make sure you have a tight trading plan if you’re trading this one!
Last one up for today is a simple range play on EUR/GBP’s 4-hour time frame. The pair is lollygagging just below the .7900 major psychological handle, which has been serving as resistance since early February. Not only that, but Stochastic has also hit the overbought levels. Think we’re about to see losses for the euro? Stops above the range resistance is a good idea if you’re one of them euro bears, but you could also wait for an upside breakout if you believe that the euro will make new monthly highs against the pound over the next trading sessions.
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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.