Breakout alert! Remember that channel retracement we were looking at yesterday? Well, it looks like NZD/USD did bounce from the level. In fact, it looks like it’s about to break out from the channel and an ascending triangle on the 1-hour time frame. A long trade at current levels could get you some pips if you think that NZD/USD will successfully break above the .6770 area. If you aren’t too sure about the move though, then you could also wait for a retracement to the resistance line before committing to a position.
Here’s one for the bajillion traders watching the dollar! USD/JPY is currently testing (and possibly breaking above) a mid-channel level on the 1-hour chart. Stochastic is currently on the bears’ side but the 171.75 area is probably the more closely-watched resistance level. For starters, it’s a channel resistance that’s near the 100 SMA levels. Shorting around the levels could be a good trade idea especially if you place your stops above the 100 and 200 SMA lines. Just make sure you keep your options open and consider different scenarios in your trading journal!
Am I seeing double? AUD/USD is sporting a similar setup to our USD/JPY above! This time the Aussie just broke above its mid-channel line and is already gunning for its channel resistance area. Will the pattern hold for another day? A short at the .7300 major psychological handle could open up a 150-pip trade if you aim for the channel support near .7150. Keep your stops wide though, as volatility is trickier for the comdolls these days. You want to get caught in a fakeout!
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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.