For the past couple of the days, EUR/USD has been rallying strongly. That being said, I think it’s safe to say that the pair’s trend is up, which means going for long trades is a good idea. Looking at the 1-hour chart, we can see that the pair is currently on retracement mode as it makes its way to a former broken resistance. If you’re bullish on the pair, this level could be a nice opportunity to buy at a cheaper level and ride the trend, especially since the level lines up nicely with the 38.2% Fibonacci retracement level.
Now let’s examine a pair whose uptrend could end very soon. As you can see, NZD/USD has been moving up day after day for quite a while now. But with price squeezing into a tightening rising wedge, we could see a reversal soon. Watch the bottom of the wedge carefully folks, as a break could lead to a huge bear rally.
Last on my list of trade setups for today is a range play on USD/JPY. Looking at the chart, it is pretty clear that the pair is bound by the strong resistance at 77.30 and major support at 76.60. If you’re one of those range traders, keep an eye on these levels closely, as they could possibly serve as inflection points.
Before you get carried away with all these chart patterns, remember that technical analysis is only half the story.
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.