Check out this retracement play! GBP/JPY just bounced from the 170.50 minor psychological area, which is near an inflection point on the 4-hour chart. Not only that, but it’s also near the 61.8% Fibonacci level. And look at that oversold signal from Stochastic! A stop below the Fibs and the 170.00 area could get you a good risk ratio if you believe that the pound is headed back to its monthly highs.
Here’s another one for the pound bulls! GBP/AUD is about to test the 1.8300 major psychological level, which is right smack at a rising trend line on the 4-hour chart. We know from the chart that the trend line has held at least four times in the past. Will the bulls go for five? Stochastic hasn’t gotten to the oversold area yet so you’ll have time to plot your stops and arrange a trading plan if you’re thinking of taking this setup.
If you’re not a fan of the pound, then you’ll like this support-and-resistance setup on EUR/GBP. The pair recently found support at .8330, a level that has served as support and resistance since December last year. Is EUR/GBP ready to leave it behind and head for the .8400 or .8500 areas? A stop just below the major inflection point is a good idea if you’re planning on taking a long trade. Just remember that this is a cross currency. You gotta make room for volatility!
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.