First up on today’s canvas is GBP/JPY in the 4-hour timeframe. With the pair testing resistance at the 50% Fibonacci retracement level, would we soon see the bears push the pair back down to 125.00? If you have a short bias on the pair, you might also like that Stochastic is already in the overbought territory, showing a bearish divergence. Just don’t get too excited cheering for the bear camp yet though. Watch out for a strong break above 128.00 as this could signal that there are enough bulls to push GBP/JPY back up to 130.00.
The euro hasn’t been getting any love lately, hitting a new all-time low against the Swissy almost on a daily basis. However, could that bullish divergence with EUR/CHF near the 1.1500 psychological handle be a signal that the shared currency is on its way back up to the bull turf? Maybe. If you’re planning to go long, it might be better to wait for reversal candlesticks and Stochastic lines to cross. Who knows, the pair still has room to go lower.
Last but not the least, we have AUD/JPY. The setup is almost the same to GBP/JPY with the pair finding resistance at the 38.2% Fibonacci level. If there aren’t enough bulls to push the pair beyond the 85.00 handle, AUD/JPY could tumble down the charts. Just be careful though. Remember Cyclopip pointed out that 84.00 is a major support area which could be a good entry level for a long. But if you can’t wait, just keep your fingers crossed for a strong break above 85.00 as this could mean that AUD/JPY would rally back up to 87.00.
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. Check him out, playas!