Let’s kick the day off with a simple trend play on USD/CHF! The pair is having trouble breaking below the .9800 major psychological level, which lines up with the 100 SMA on the 1-hour time frame. Not only that, but it’s also being supported by a rising trend line! Stochastic has just left the oversold area so there might be a bit more room for some more buying. Stops just below the trend line and the SMAs could yield a good reward-to-risk ratio especially if you aim for the previous highs.
Remember that rising channel-Fib action that we looked at yesterday? Well, here’s another view from the 1-hour chart. AUD/USD is currently testing a rising channel support, which is right smack at the .7600 major psychological handle. Oh and look at stochastic just chillin’ like a villain on the oversold territory! Buying at the current levels with stops below the trend line could make for a good trade if you think that the Aussie isn’t done gaining on the dollar just yet. On the other hand, you could also wait for a break below the support areas if you’re one of them Aussie bears.
I spy with my cool, blue eyes an ascending triangle in the making! While NZD/USD is being supported by a rising channel and 100 SMA on the 1-hour chart, it’s also being held back by the bears hanging out just above the .7300 mark. Who will win the tug-o-pips? The School of Pipsology says that triangles like this tend to break to the upside. The idea is looking good right now especially with stochastic in the oversold area. An upside breakout isn’t a done deal, however, as there have been ascending triangles that have also seen downside breakouts. In any case, make sure you’ve brushed up on your breakout strategies before going near this setup!
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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.