First up, here’s EUR/USD for y’all! With Stochastic already indicating overbought conditions and sporting a bearish divergence (it’s making higher highs while price is making lower highs), some of you probably see the euro’s recent rally as nothing more than just a retracement. So if you’re feeling bearish for the pair, it might be a good idea to be on your toes for signs of a reversal between 1.3150 and 1.3200, which is the area between the 38.2% and 61.8% Fibonacci retracement levels. Be careful not to get excited selling EUR/USD though. Who knows, there may still be enough buyers in the market to push the pair back up to 1.3290.
There’s also a similar Fib play setup on AUD/USD if you fancy comdolls like Happy Pip. On the 1-hour chart, we see that Stochastic is fast approaching the overbought territory and the pair could find resistance at the 38.2% Fib level which coincides with the previous support area. Reversal candlesticks around the 1.0550 area could mean that AUD/USD is on its way down to 1.0450. However, a strong break above the level may hint that the pair will rally to 1.0600 or maybe even 1.0650!
Lastly, for those looking to sell GBP/JPY, here’s a setup that may just tickle your fancy! On the 4-hour timeframe, we see that the pair seems to have formed a head and shoulders chart pattern which could hint that the pair would soon tumble down to 127.00. However, as I always warn, don’t get too giddy. Be wary of a close above 129.00 as the remaining buyers in the market could still push GBP/JPY back up to 130.00!
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.