First off, here’s a simple range play on GBP/JPY’s 4-hour forex chart. The pair has been bouncing off support near the 170.00 major psychological level and resistance at 173.00, forming a 300-pip range that could continue to hold. Price is making its way to the top and gearing up for another test of resistance. Stochastic is already moving down from the overbought zone, indicating that sellers are starting to take control and trying to push the pair back to the range support.
Brave enough to take a countertrend play? Then you should have a look at this channel setup on CAD/JPY’s 4-hour forex chart! Price is currently testing the top of the channel, which is right around the 94.00 major psychological level. Stochastic hasn’t quite reached the overbought zone yet, which means that buyers could still push the pair a little higher before letting the bears take over. If that happens, CAD/JPY might head back to the channel support near 93.00 or at least until the middle of the channel at 93.50.
Hold up, we’ve got a trifecta right here! See how the 50% Fibonacci retracement level lines up with a former support area and the falling trend line on NZD/JPY’s 4-hour forex chart? This could hold as a pretty strong resistance level for the pair, especially with stochastic already headed south. NZD/JPY could still make a test of the 87.50 minor psychological resistance or start selling off from its current levels until the previous lows at the 86.00 mark. Make sure you set your stop outside the trend line or above the 61.8% Fib if you’re planning to short!
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.