First up is a countertrend alert on GBP/USD. The pair is having trouble breaking below the 1.4500 mark, which is not surprising since it lines up with a falling channel support on the 1-hour time frame. With Stochastic hanging out in the oversold territory, is it time for Cable to see some gains? Buying now with a stop just below the channel could get you some pips if you think that the pair would revisit the channel resistance. On the other hand, you could also wait for the pair to hit the 1.4600 handle if you’re one of them pound bears. Can’t blame you if you do that, especially since the psychological area is near not only the falling channel resistance but also the 100 SMA on the chart.
Check out this simple support play on AUD/USD! The Aussie has been eating the Greenback’s dust for days now, this time dropping below the closely-watched .7000 pyschological level. Not all hope is lost for the bulls though, as the .6950 area is still a pretty significant area of interest for the pair. In fact, the level has supported AUD/USD twice since August last year. Think the Aussie is about to catch a break from the dollar? A long trade at current levels could certainly get you a good reward-to-risk ratio if you aim for at least the .7150 area. I wouldn’t recommend buying though, at least not until the pair shows some momentum for a legit bounce higher. Still, this one’s an opportunity that bears watching closely!
Here’s one for trend traders out there! GBP/JPY is currently hitting the 170.00 major psychological handle, which is right smack at a 38.2% Fib retracement level on the daily chart. What makes this setup interesting is that there’s also an SMA crossover on the chart, an event that we haven’t seen since late 2014. Yep, no crossover at all in 2015! A long trade around the 170.00 area is a good idea if you think that the pound is about done showing retracements against the yen. Of course, you could also wait for a break below the Fib lines and trade a possible start of a downtrend if you think that the yen won’t be losing its mojo anytime soon.
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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.