It seems like USD/JPY has been trending higher and higher. Just a while ago, it formed a new higher high, after bouncing convincingly from a rising trend line. Where do you think it’s headed? With price currently pulling back, I think we’ll see the pair retrace first. If you’re bullish on the pair and want to ride the overall uptrend, perhaps it is best to be patient and wait for price to fall back to the 61.8% Fibonacci retracement level. Not only is it a major Fib level, but it lines up nicely with the rising trend line.
Can’t get enough of retracement plays? You’re in luck — we’ve got another one on GBP/USD! This pair has managed to make its way back to 1.5550, which was once a solid resistance level. The best part is that Stochastic is already signaling oversold conditions! Think it’s time for price to rise? Aim for the previous high at around 1.5700. On the other hand, if you feel that the pair is doomed to fall lower, wait for a clear break of the Fib levels before going short.
Don’t look now, but EUR/JPY is near a major resistance level! This bad boy has been trading within a massive 450-pip range for the past couple of months, and now it’s within striking distance of the 132.50 handle. If you think the range will hold, look to sell near the top! If you feel that bulls will remain in control and forge a new high, it’s best to wait for price to push and hold above the resistance zone before committing to a long position.
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.