This won’t be the last flag you’ll see on the charts today! As with many dollar pairs, AUD/USD has been in consolidation since last Friday. Have Aussie bears run out of steam or are they merely gathering strength before pushing the pair further down? Since the flag formed after a strong move down, the bias is for a breakout to the downside. That being the case, it may be wise to play a break of .9700 as it seems to be a major support level.
If you love retracement plays, then you’ll love this setup on GBP/USD, hommes! As you can see, after diving sharply on Thursday, the pair has slowly been creeping higher. This may be a good opportunity to sell the pair. The way I see it, there are two potential ways to play this if you plan to short GBP/USD. You can either wait for it to test the Fib levels and short on a bounce, or you can short at the break of the mini rising trend line that I pointed out. Either way, it’s best to wait for confirmation from candlesticks before you act.
Rounding up today’s trio, we have GBP/JPY! Similar to GBP/USD, this pair has been on a clear downtrend as of late, and now it looks as though sellers are getting ready to jump back in. So far, the falling trend line has been holding quite well, and the 50% Fib level has not been crossed. If you’re feeling bearish for the pound, now might be a good time to short since Stochastic is already signaling overbought conditions. Just remember to practice smart risk management, guys!
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!