Retracement time! After finding resistance at the .7200 area, AUD/USD looks like it’s consolidating back to the .7150 levels. Aussie bulls are likely on their toes on this one, especially since the level is lining up with Fib supports on the 4-hour time frame. Stochastic is also currently on the bulls’ side with its oversold signal. A stop just below the rising channel’s support and a target around early October highs is a good idea if you’re planning on buying the pair. You could also place a small trade and just build your position if you aren’t too sure about the Aussie’s future gains.
Here’s one for range traders! Yesterday’s strong pound moves brought GBP/CAD down by almost 250 pips, the full length of its range on the 4-hour chart. Will the 2.0000 major psychological handle act as support in this case? A quick look at the chart shows us consolidation candlesticks while Stochastic is chillin’ in the oversold territory. A stop below the range would make for a good trade if you think the pound would head back to the range resistance area while a waiting for a downside breakout is your best bet if you think the pound will still see losses in the next couple of trading sessions.
Last one up for today is a simple area-of-interest play on EUR/GBP. The pair popped up by around 150 pips yesterday, bringing the price action to the .7150 levels. What makes it interesting is that the area has served as strong resistance levels back in late July and early August. Not only that, but it’s also currently lining up with the 38.2% Fib on the charts. The pair has yet to show hesitation candlesticks and Stochastic has yet to cross below the overbought territory so you’ll have time to confirm a possible move lower. In the meantime though, you could get started on computing for potential position sizes and risk management strategies you could use to make pips from this possible move.
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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.