Daily Chart Art – June 21, 2016

GBP/JPY: 4-hour

GBP/JPY 4-Hour Forex Chart

GBP/JPY 4-Hour Forex Chart

Fib alert! GBP/JPY is having trouble breaking above the 153.50 minor psychological handle, which is right smack at a 38.2% Fib and the pair’s support area back in April. Not only that, but stochastic is also flashing an overbought signal. Will these signals spell trouble for the pound? A short trade at current levels could get you a good reward-to-risk ratio especially if you place your stops above the Fibs and aim for the previous lows. Just remember to keep your stops wide, aight?

EUR/CAD: 4-hour

EUR/CAD 4-Hour Forex Chart

EUR/CAD 4-Hour Forex Chart

Here’s one for the countertrend traders out there! EUR/CAD is lollygagging at the 1.4500 handle, which lines up with the pair’s mid-channel support on the 4-hour time frame. What’s more, stochastic is about to hit the oversold territory. Think the euro will bounce higher against the Loonie? Buying at current levels is a good idea if you’re one of them euro bulls, but you can also wait for the pair to retest the falling channel’s resistance and shoot for a short trade instead if you prefer better reward-to-risk opportunities.

GBP/USD: Daily

GBP/USD Daily Forex Chart

GBP/USD Daily Forex Chart

Here’s another one for my trend-trading friends! Cable is currently testing the 1.4650 psychological handle, which hits the falling trend line resistance on the daily chart. Oh, and look at that 200 SMA keeping the bulls in check! Shorting at market could make for a good trade if you think that the pound bulls are done with their hustling for now. Just make sure you practice good risk management, aight? I hear from Pip Diddy and Forex Gump that this pair is about to see some action…

Forex Chart Settings:

Slow Stochastic: 14,3,3
100 SMA: Blue line
200 SMA: Red line

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.

  • Mark

    Hey I took this GBPUSD trade and lost a fair share on it (luckily on a demo account) how should I have played it? I went short on it early yesterday after I saw some bearish momentum from the resistance area and I got stopped out ferociously today when it just shot up. I had my stop slightly above the resistance area. At one point I had $700 in profit with a lot size of 1. I feel like I should just take my profits and not let things ride since I usually lose when I try to let things play out. Any thoughts? Oh and also took the GBPJPY trade as well and it has been blowing up on me going up to the 61.8 retracement

    • Big Pippin

      Hey Mark,

      Sorry to hear about your losses. Trading GBP/USD was both brave and tricky especially right before the EU referendum vote. Good thing you were using a demo account!

      In hindsight a bit of fundamental analysis would’ve been handy for the trade. If I remember correctly, speculations of the Remain vote winning was what boosted the pound. Keeping closer tabs could’ve also worked since the pound was under a big spotlight that week.

      Hope this helps!