Dollar warriors huddle up! USD/CHF is consolidating in a potential ascending triangle on the 1-hour time frame. Before you buy the Greenback like there’s no tomorrow though, you should also know that triangles like these don’t always end in upside breakouts. In fact, it looks like the 100 and 200 SMAs are flattening out and might soon see a crossover. Keep close tabs on this one, will ya? A breakout in either direction could attract dollar bulls and bears alike and produce volatility enough for a decent trade!
Guess who’s back, back again? GBP/NZD is pulling a Slim Shady on the markets, as it goes back to its uptrend levels after falling down to the 1.7400 major psychological area. The 1.7900 MaPs is the area to watch since it lines up with a resistance from a rising channel that the pair had just broken. Don’t discount the 1.7800 level though! Pound bulls could very well run out of steam around the mid-channel level especially since stochastic is already in the overbought territory and the 100 SMA has just crossed below the 200 SMA. Shorting around 1.7800 and 1.7900 is a good idea if you’re one of them countertrend traders. But if you’re into trading with the trend though, then you can also go long at current levels and place your stops just below the channel support.
Breakout alert! Remember the falling trend line that we spotted a couple of days back? Well, it looks like the bulls have found a way to break above the barrier! GBP/JPY is currently trading around the 143.50 area, which is right smack at a 200 SMA resistance on the daily time frame. Are we looking at an upside breakout? Or is this a fakeout in the making? Buying above the resistance is your best bet if you’re one of them pound bulls, though you can also wait for a retest of the broken trend line if you want to be more conservative on your entries. In any case, make sure you use wide stops when trading yen crosses like this one!
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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.