First up, let’s take a look at this setup forming on GBP/JPY! At first glance, Guppy price action looks pretty choppy but a closer look will reveal that the pair is actually trading within an ascending channel. Now that price has bounced off the top of the channel and Stochastic is overbought, don’t be surprised if we see the pair fall. Just keep an eye out for the middle of the channel at around 123.50, as it’s served as solid support so far this week.
Next up, we’ve got another channel on USD/CHF, but this time it’s of the descending kind. And just like GBP/JPY, the pair seems to be finding solid support at the middle of the channel at .9450. Considering that a hammer just formed, I wouldn’t be surprised if we see the bulls make another move to try and bust out of the channel. For now, I suggest waiting for another retest of the top of the channel before establishing a short position.
Lastly, here’s a sweet Fibonacci setup on NZD/USD. After bottoming out at .7500, the pair has risen almost 500 pips and is now testing the 61.8% Fibonacci level. With this level also lining up with the psychological .8000 handle and with Stochastic deep in overbought territory, will we see the bears bust out the big guns and make another drive-by down south? I suggest taking a chill pill first and waiting for a reversal candlestick to form before putting your money on the line on this setup!
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.