If you’re itching to short the euro, then you might want to be a little more patient in waiting for this market correction to play out. On its 4-hour forex chart, price looks ready to pull back to the 38.2% Fibonacci retracement level, which is close to the 1.3700 major psychological level and the 200 SMA. This also coincides with a broken support zone, which means that it could act as resistance later on. Stochastic is already moving down from the overbought zone, indicating that euro bears might take control of price action sooner or later.
Here’s another potential retracement play on the euro. EUR/GBP has been on a very strong downtrend for the past few months, as shown by the falling trend line that’s been holdin’ like a boss! Price appears to be having difficulty breaking below the .7950 minor psychological level for now, as it might need to gather more buying pressure before heading lower. A pullback to the trend line and 61.8% Fib might take place, with the 100 SMA also likely to hold as resistance for any rallies. Make sure you set your stop above the 200 SMA if you’re planning to short this one!
Missed the USD/CHF breakout play I showed y’all yesterday? Don’t fret! You might still have a chance to hop in the selloff with this retracement setup. On its 1-hour forex chart, USD/CHF is showing signs of retreating to the broken support area, which is right around the 61.8% Fib. A shallow pullback might mean that the 38.2% level could hold as resistance already, especially since stochastic is almost in the overbought zone. If you’re torn between entering at market or waiting for a higher pullback, you might want to consider scaling in as a trade strategy.
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.