Can’t get enough of selling the dollar? Here’s one for you! USD/CAD hit support just below 1.3650 yesterday and it looks like it’s headed for the 1.3800 area. This could be a sweet spot for retracement traders, as it lines up with a 38.2% Fib level and a broken falling trend line support. Not only that, but Stochastic has also just hit the overbought territory. Think USD/CAD will see more losses soon? An entry somewhere near the broken trend line could make for a good trade if you think that the pair is headed for new lows. Of course, you can also wait for new lows if you’re looking for downside momentum and a longer-term trade for this one.
Here’s a setup that my 3-year old niece can spot while playing with her toys! EUR/CHF is having trouble breaking below the 1.1100 handle, which is right smack at a rising trend line and 100 SMA support on the 1-hour time frame. What makes this setup more interesting is that Stochastic has also hit the oversold area. A long trade at current levels and a stop just below the trend line could get you a decent setup if you think that the euro will go back to its previous highs. Be careful of currency cross volatility though!
Someone holler at Huck for this one! Cable is showing signs of hesitation around the 1.4600 major psychological handle, which is also near a 61.8% Fib and 200 SMA levels on the 4-hour time frame. This is convenient especially if you’re also watching the overbought Stochastic signal. What’s more, a close look at the candlesticks also reveal some wicked wicks, which are hinting that the bulls are having trouble chalking up more bullish candles. Are the bears about to take over the pair’s price action? Read up on entering trends with Fibs if you haven’t tried it yet!
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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.