Remember that breakout setup that I pointed out yesterday? Well, it looks like the pair did break lower after all! The move found some resistance around the 1.3250 area though, which is why USD/CAD is now trading back at the 1.3300 levels. Watch out for this one, forex fellas, as the area is also near not only the Fib resistance areas but also the SMAs and a previous support level. This break-and-retest setup could get you pips if you place your stop just above the Fib levels and aim for previous lows. Just keep your risk management tight in case this is a fakeout we’re seeing!
This one’s so easy my three-year old niece could trade it while eating her cereal! GBP/JPY is on a rising trend line and is in fact on its fourth test this week. What makes the setup sweeter is that it’s also trading near a 100 SMA support around the time when a divergence has popped up on the 1-hour time frame. A long trade with a stop just below the trend line i a good idea especially if you aim for the previous highs. Read up on trading trends if you haven’t tried it yet!
Last one up for today is a potential trend continuation play on EUR/CAD. The pair has been on a 200-pip range since the start of the month but this time the bulls are getting pressure from a 100 SMA, bearish divergence, and an overbought Stochastic signal. Think we’re about to see a downside breakout on this one? A short at current levels could get you in on a trend continuation move if you’re confident that the euro will continue to drop against the Kiwi. Of course, you could also wait for an actual downside breakout if you aren’t sure about further weaknesses for the euro.
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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.