Trend traders huddle up! EUR/GBP looks like it’s headed for the .8550 minor psychological area, which is right smack at a rising channel support and 100 SMA on the 1-hour time frame. Be careful though! Stochastic is already in the oversold territory, which could prompt the bulls into trading the mid-channel support instead. Buying at current prices could get you in on the uptrend but waiting for a retest of the channel support would provide better reward-to-risk ratio. Watch this one closely for a bounce opportunity!
NZD/USD is now back at the .7300 major psychological handle, which lines up with a broken symmetrical triangle resistance. Not only that, but the 100 and 200 SMAs are also supporting another leg higher. The cherry on top of this setup sundae is an oversold stochastic signal. What do you think? Are we looking at a resistance-turned-support scenario in the making?
Speaking of resistance-turned-support scenarios, EUR/CAD is also back at the 1.4700 – 1.4675 levels, which had served as a range resistance back in August. The area is also pretty close to the 100 and 200 SMAs on the 4-hour chart, so expect to see a bit more support from the bulls around the levels. Buying around the support area is a good idea if you think that the euro would get back to its 1.4850 highs. Of course, you could also trade a break below September’s lows if you think that we’re just seeing a big fakeout and that EUR/CAD will soon go back inside the range.
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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.