First up on today’s roster is EUR/JPY on the 4-hour timeframe. With Stochastic already indicating oversold conditions and the pair stalling at the major psychological handle (101.00), will we see a retracement soon? If we do, watch out for the area around 102.50 at the 38.2% Fibonacci retracement level. Let’s see if the pair will find resistance at the previous support area! If if doesn’t, EUR/JPY may just rally all the way up to 105.00.
Next up is GBP/JPY, chillin’ like ice cream fillin’ at the 61.8% Fib. Will support at the level hold? (After all, Stochastic suggests that the pair is already oversold.) Maybe. But I would wait for reversal candlesticks around 118.50 before going long. There may still be enough bears in the market to push the pair back down to 117.00.
Lastly, let’s zoom out to the weekly timeframe and check out AUD/USD sportin’ those sexy Fib lines! It looks like the bears are on a roll, huh? However, with Stochastic already crossing the oversold territory, I think that we might see the pair stall around .9200 which is a previous resistance area and also the 61.8 Fib. Watch out for reversal candlesticks around the psychological handle as they may signal that the pair is on its way back up to parity. On the other hand, if we see a strong break below .9200, it could mean that the pair will continue to trade lower.
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!