Euro bears huddle up! EUR/USD hit a resistance a 1.0900 early this week and it looks like it’s headed for more losses. In fact, it could even be open to a move all the way down to 1.0700 judging by the falling channel on the 1-hour chart. Think the euro is about to take more beating from the Greenback? A short trade around current levels could still get you a decent trade if you place your stops above the previous resistance. Gotta watch this setup closely though, as the mid-channel line as well as the SMA crossover can mess up this trend play. Make sure you have your trading plan in place before you take this one!
Here’s one for breakout traders out there! AUD/JPY is trading along what looks like a symmetrical triangle after falling by as much as 500 pips over the last couple of weeks. If you’ve read your School of Pipsology, then you’ll know that we could be looking at a bearish pennant that would give us another 500 pips. With price already about to hit the 100 SMA on the 1-hour chart, I wouldn’t be surprised if the bears are all lined up. Be careful about trading yen crosses like this one though! You never know when a spike in volatility can take out your stops. Make sure you plan ahead!
Last one up for today is one that my buddy Cyclopip is also looking at on his Weekly Watch. EUR/GBP is lollygagging along the .7450 area, which has been serving as resistance since early last year. What’s more, a bearish divergence is popping up on the daily chart. Will EUR/GBP’s resistance hold? A short at current levels could get you a good reward-to-risk ratio if you aim for the previous lows. Just make sure that you have loose stop losses, aight? Currency crosses tend to be more volatile than the majors!
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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.