Aww, snap! After days and days of getting sold off, it looks like the Aussie finally made a comeback! If you think that its rally would carry on, it would be a good idea to keep tabs on in the area between the 38.2% and 50% Fibonacci retracement levels where the pair previously found resistance. Reversal candlesticks around .9700 could mean that price would bounce off the level. Don’t get carried away though! A strong break the major handle could mean that AUD/USD would resume its slide.
If you’re a fan of cross currency pairs, here’s a setup that may just tickle your fancy. On the 4-hour timeframe, we see that EUR/JPY has just broken support around 130.50. Price is now testing the area which coincides with the 38.2% Fib level and if resistance holds, we could soon see it drop to 129.00. However, if the euro still has enough muscle to hustle, we could see the pair pullback higher to around 131.00 (61.8% Fib) and test the falling trend line. Heck, if there are enough bulls in the market, we could even see a break above it! What do ya think?
Do you see what I see? On the 4-hour timeframe, USD/CHF has just bounced off the rising trend line and 61.8% Fib. Is it time for the pair to resume its rally? Maybe. But be careful! A strong close below yesterday’s low could mean that the pair is on its way down to .9250!
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.