First up is an easy peasy resistance play on EUR/JPY. The pair is currently lollygagging around the 128.50 – 128.00 areas, which has been serving as solid resistance area since early this month. Will the bulls finally have enough muscle for an upside break or will the bears once again succeed in defending the level? Stochastic isn’t any help right now with its lack of signal, so you might want to take it easy when placing your entries around current levels. Make sure you have your trading plans handy before you place any trades on this one!
Who’s up for a break-and-retest play on EUR/GBP? As you can see above, the pair had broken a rising channel before finding support at the .7550 levels. Right now it looks like it’s headed for the .7650 area, which is right smack at the 50% Fib, previous support, and 100 and 200 SMAs on the 1-hour time frame. A short trade at the Fib levels could get you a good reward-to-risk ratio if you think that the pair would drop back to last week’s lows. Make sure you manage your risk though, and make allowances in case we’re looking at a fakeout after all.
Here’s another trend play for ya! As marked above, AUD/NZD has been trudging along a rising channel on the 1-hour chart since the start of the month. It’s currently consolidating around the 1.0800 area, which lines up nicely with a mid-channel support. Think we’re about to see a bounce from the pair? A long trade at current levels might give you decent pips if you think that the pair is headed for its new highs. Just make sure you make allowances for volatility, as currency crosses like this one usually shows more volatility 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.