Let’s start off with this trend setup on NZD/USD! The Kiwi is currently testing the .8150 area, which is right smack at the resistance of a descending channel on the 1-hour chart. What’s more, I’m seeing a bearish divergence with price forming higher highs and stochastic showing lower highs! Are the bears ready to attack at the level? A stop just above the pattern could get you a sweet risk ratio if you think that the pair would drop to its channel support.
I spy with my awesome eyes a retest of a major resistance area! EUR/AUD is having trouble breaking above the 1.4900 handle, which had effectively held off the bulls back TWICE in August. Think it will hold again this time? The overbought stochastic signal isn’t stopping the bears, that’s for sure. Entering a small position now could work if you’re not sure about the pair’s direction. You could also wait for more bearish candlesticks to form or stochastic to leave the overbought area. In any case, make sure that you got your stop losses covered when you enter a position!
If you can’t get enough of high reward-to-risk setups, then this is for you! CAD/JPY is almost at the 97.00 area, which is the top of a range that has been holding since the second half of the year. You could wait for the pair to actually reach 97.00 if you think that the Loonie still has room for gains, but you could also place a small position now if you believe that the bulls have already exhausted their efforts.
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.