Here’s a trending market that just can’t be stopped. And now that it’s broken above parity, it should draw in more forex traders (at least the ones that are still around) to go with the flow and buy more. The obvious play here is to just buy, but for you conservative traders out there–and those who see that stochastic in overbought territory–a retest to parity is likely to draw some interest from buyers and potentially hold as support in this uptrend.
We’ve got a consolidating market in NZD/JPY, and it looks like we’ve got a rising triangle pattern forming with the lower “lows” and strong resistance at the 83.00 handle. Third time could be the charm for buyers to finally breakout higher, but with the stochastic in overbought territory, the Force could still be strong with the sellers!
Last one up for today is a longer-term setup on EUR/GBP. Looking at the daily chart above, we can see that the pair has gone almost parabolic higher, nearly reaching the top of a range that has been going on since the beginning of 2015. Will the pair retest the .7450 area and will it hold? Well, looking at the stochastic, chances are that it may hold, but with a strong, broad weak sentiment on the British pound lately, it may be a great idea for a hold and reversal before throwing up those short orders.
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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.