Let’s kick off the day with a potential bounce on GBP/USD‘s 4-hour chart. Cable got rejected at the 1.5850 area, and it seems that it’s heading fast towards the 1.5750 handle. Look out for this area because not only is it near a minor psychological handle, it’s also a possible mid-channel support right between the 50% and 61.8% Fibs! Oh, and have I mentioned that Stochastic just touched the oversold region?
Early this week AUD/JPY sported a spinning top on the daily chart, which usually indicates indecision between currency bulls and bears. The bears might be getting a bargain though, since the spinning top closed around the 86.00 major psychological handle. Not only that, I’m also seeing a bearish divergence and overbought Stochastic signal in the works. A stop above Monday’s candle might be good for the bears, while the Aussie bulls can wait for a break above 86.00 before going long.
Last one up for today is a possible bearish pennant on EUR/CHF‘s daily chart. The pair has been consolidating at the 1.2100 level after falling almost steadily from the 1.2250 area since late last year. If you’ve read your School of Pipsology, then you’ll know that pennants usually signal a continuation of a trend. Be careful in shorting this one though, as the major 1.2000 handle is but a few pips away!
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.