Ah, the gift that keeps on giving! We’ve been watching NZD/USD’s uptrend for a while now, and this time it’s about to approach another resistance. The pair is currently at the .7000 area, which lines up with a resistance in mid-April. Not only that, but the major psychological handle is also near the channel resistance on the 4-hour time frame. The cherry on top of the bears’ sundae is an overbought stochastic signal. A short at the .7000-.7100 area could make for a good trade if you’re one of them countertrend traders. Make sure you place solid stops above the resistance levels though. Countertrend trading isn’t for everyone!
Here’s an easy peasy one for the range traders! AUD/JPY has bounced from the 80.50 handle, which hasn’t been broken as a support since the start of the year. Stochastic is also about to hit the oversold region, so you might want to load up your long trades if you’re long on the Aussie. Be careful in trading this one though, as yen crosses tend to be more volatile than the majors. Make sure you leave enough room for extra volatility!
Here’s another one for trend warriors out there! EUR/CAD just bounced from the 1.4300 handle, which had lined up with a rising trend line that’s been valid since mid-2015. What makes this setup more interesting is that there’s also a bullish divergence on the daily chart while stochastic is chillin’ like a villain on the oversold territory. A long at current levels could give you a good reward-to-risk ratio especially if you aim for the previous highs. Of course, you could also wait for a downside break if you believe that the euro is about to lose some more pips to the Loonie. Whatever your strategy is though, make sure you practice good risk management when you execute them!
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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.