If you like combining Fibs with support and resistance levels, then this setup is just for you! On its 4-hour time frame, GBP/USD appears ready to retest the area of interest just above the 1.6200 major psychological level. The resistance level around 1.6225 lines up with the 50% Fibonacci retracement level, suggesting that it could act as strong support. Stochastic has moved out of the oversold region though, which means that bulls are ready to charge!
Think the trend is your friend? Feast your eyes on this potential uptrend continuation for USD/JPY! The rising trend line on the 4-hour time frame is still intact but the pair is currently testing that support level. Stochastic has climbed out of the oversold area, hinting at a possible bounce, but don’t dismiss the likelihood of a breakdown just yet! Take a moment to review our lesson on trading breakouts if you think the uptrend is over.
Divergence alert! GBP/JPY has formed higher lows while stochastic indicated lower lows, creating a bullish divergence and suggesting a potential rally. At the same time, the pair is close to a former resistance level around 169.75. That’s in line with the 61.8% Fib, too! Make sure you set your stop below that area if you’re planning to jump in a long trade and set your sights on the previous high near 175.00 if the rally has legs.
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.