Here’s a nice countertrend trade for ya! USD/JPY recently found resistance at the 120.50 minor psychological handle, which is right smack at the rising channel resistance on the 1-hour chart. What’s more, Stochastic has also just left the overbought region. If the dollar bears find momentum today, then we might see the pair drop to at least the 120.00 zone. Watch this pair closely though, as the bulls might not even wait for a decent retracement before they go back to buying the Greenback. A break above the channel could push the pair all the way to the 121.50 resistance seen in early March.
Not feelin’ like buying the yen? Check this out! AUD/JPY is sporting what looks like a bullish pennant after spiking by at least 100 pips from yesterday’s price action. Will the consolidation translate to another move higher? If you’ve read your pennants lesson in the School of Pipsology, then you’ll know that we could likely see a break higher for the pair. It’s still not set in stone though, so be careful in trading this one!
Last one up for today is his potential symmetrical triangle in the making. Though GBP/NZD’s gains have been contained by the 100 SMA since mid-March, the higher lows are suggesting that the bulls are putting up a fight. Tug-o-pips like these usually end up in breakouts but for now we don’t know which camp has more muscle. Read up on trading triangles and breakouts if you’re planning on taking this one!
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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.