We’re kicking off the day with this pullback setup! After falling to the .7050 area, AUD/USD has trudged higher and is now about to hit the .7200 psychological levels. Forex bulls better be on their toes though, because the 200 SMA and 61.8% Fibs are threatening the Aussie’s advance. The SMA has been holding since mid-October so there’s a good chance that the bears are also waiting at the level. If you’re one of them bulls though, then you can also wait for a break above the resistance areas and wait for an uptrend to emerge.
Here’s one for range traders! USD/JPY has been on a 100-pip range since mid-October and it doesn’t look like it’s about to see a breakout anytime soon. Right now it’s hitting a slight resistance at the mid-channel levels while Stochastic is chillin’ in the overbought territory. You can go for a 50-pip trade if you think the pair will head back to its support zone. If you’re an SMA fan though, then you can also place a tight stop just below the moving averages and wait for the dollar to hit its previous highs.
Last one up for today is a simple trend play on CAD/JPY. Much like in USD/JPY, the Loonie is hitting a mid-channel support on the 1-hour time frame. Stochastic hasn’t hit the overbought signal though, so it’s possible that the pair would head to on to make new highs. A stop jut below this week’s lows could make for a good trade if you believe it will go up to 93.00 but you can also wait for a couple more candlesticks to see if it takes off from the mid-channel lines before pulling the trigger on your long trade.
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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.