Will USD/CAD’s trusty range hold? The pair has been bouncing between support around .9850 and resistance near 1.0050 for almost an entire month already, and it looks like support is being tested once more. After that sharp dive from 1.0050 last week, the pair is showing a bullish divergence right at the bottom of the range. If USD/CAD makes a strong bounce, it could go all the way back up to the top of the range. But if Loonie bears lose strength, we could finally see this baby make a break for it!
Now here’s a setup Huck might like to keep her eyes on. USD/JPY has been trading inside a falling channel on its 4-hour chart since the start of April, with the pair making a strong bounce from the bottom earlier this week. However, it looks like dollar bulls aren’t done yet! Although stochastic is giving the overbought signal already, dollar bulls seem to be pushing the pair higher and out of the channel. Make sure you check out the lesson on Trading Breakouts if you plan to jump in a long trade on this one!
If you’re a fan of retracements, listen up! Here’s a potential break and retest play on AUD/JPY. After breaking below support near the 85.00 major psychological handle the other week and dipping to the 83.00 mark, AUD/JPY seems to be in the process of pulling back to the broken support level. As luck would have it, that level lines up with the 61.8% Fibonacci retracement level, which could act as resistance for the pair. Note that stochastic is already in the overbought zone, which means that the pair’s drop could resume at the 50% Fib resistance. Better keep a close eye on those candlesticks for clues!
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.