Wow, it looks like a falling channel on GBP/USD‘s 4-hour chart is starting to form nicely. The price just hit the top of the channel around the 1.5530 level and formed a shooting star. With the Stochastic indicating that the pair is severely overbought, it seems that we could see traders jump in again to take the pair lower. If you have a bearish bias on Cable, then watch the pair closely! It could experience a huge drop very soon!
Ooh la la! I think I spy a bearish divergence on the 1-hour timeframe of USD/CHF! See how price is making higher highs while Stochastic is making lower highs? Using the Fibonacci retracement tool, we also see that the pair just bounced off the 38.2% level. This may mean that USD/CHF is on its way back to test the major support level just around the .9300 handle. However, if there aren’t enough bulls around, we could see the pair continue trading higher.
Finally, here’s another swing trade setup for ya! On AUD/USD‘s 4-hour chart a gravestone doji has just formed. Not only that, it looks like there’s also a bearish divergence and an overbought Stochastic signal to support a bearish trade! Be careful in your Aussie shorts though. Happy Pip just told me that there’s also a potential symmetrical triangle breakout on the daily chart, which could limit AUD/USD’s downside.
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.