First up is a neat mid-range action on EUR/JPY. The pair has been struggling to break above the 132.50 area, which isn’t surprising since it’s been an area of interest at least late October. This time around there’s also a divergence as well as SMAs in the mix, which should make it more challenging for euro bulls to step up their cause. A stop just above this week’s highs could get you some pips if you aim for the range support near 131.65 though you could also wait for a touch to 133.00 if you think the bulls aren’t done pushing just yet.
Here’s a setup that your four-year old nephew can trade with his eyes closed! After hitting a low around the 1.5000 area, EUR/AUD has popped back up and is now trading just below 1.5200. The level has held as solid support last week, so it’s no surprise that it has become an area of interest for the bears. Of course, it also doesn’t hurt that the 100 and 200 SMAs, as well as a bearish divergence, have popped up to support the bears’ cause. A stop just above the SMAs could get you a sweet deal if you aim for the previous lows. Keep in mind that you’re trading a currency cross pair though, where tight stop losses are as recommended as sticking your tongue to a frozen pole.
Last one up for today is a simple channel resistance action on EUR/CAD. The pair has recovered from its trip to the 1.4150 levels and is now back up to the 1.4350 minor psychological area. The bears are likely waiting to pounce, as price is currently near a channel resistance and the 100 SMA line on the 1-hour time frame. And let’s not ignore the almost overbought Stochastic signal on the chart! You could get more than a few pips if you bet on the falling channel remaining intact, though you might want to keep your trading journal full of contingencies in case we see an upside breakout today.
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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.