Breakout alert! EUR/JPY is forming what looks like a descending triangle on the 1-hour chart after hitting resistance at the 132.00 area. Right now the pair is finding support at the 130.50 minor psychological handle and the lower highs are hinting at a possible downside breakout. If the pair breaks below the support and the 100 SMA crosses below the 200 SMA, then the bears could gain momentum and push for a move to 128.00. Be careful in trading this setup though, as not all descending triangles break to the downside. In fact, we might even be looking at a bullish pennant in the making!
Comdoll traders huddle up! EUR/AUD has found resistance at the 1.5800 handle and it looks like it’s headed for some Fibonacci retracement levels. The 1.5550 – 1.5600 area is a neat place to buy, as it’s a broken resistance level that’s also near the rising trend line and SMA support on the 1-hour time frame. Think the euro will continue to gain against the Aussie this week? A stop below the SMAs and rising trend line is a good idea if you’re one of them euro bulls. Just make sure you leave enough room for extra volatility when placing your stops!
Last one up for today is a revisit of the USD/JPY daily chart that we’ve been looking at since last week. The pair has dropped since we last spotted the resistance and is now testing the falling channel support. Not only that, but Stochastic is also almost at the oversold area. Will the dollar bulls step in to defend the pair, or is it due for another leg higher? As with trading the yen and long-term time frames, keep your stop losses loose if you’re planning on trading this one!
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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.