First up for today is an easy breezy downtrend play on GBP/JPY. The pair is consolidating at the 162.00 major psychological handle, which is right smack at a falling channel resistance on the 1-hour chart. What makes this setup more interesting is that there’s also a bearish divergence on the chart. A short at current levels could get you a good reward-to-risk ratio if you place your stops just above the resistance lines. Just make sure you leave enough room for volatility for yen pairs like these!
After finding support at the .7500 handle near the 100 SMA, AUD/USD has popped up and is currently knocking at the doors of a broken rising trend line. Will we see a support-turned-resistance scenario here? Stochastic is currently supporting the bears near the oversold territory, but you can always wait for a few bearish candlesticks before you confirm a move lower. Of course, you could also buy at the break above the trend line and place your stops below the previous support if you think that the Aussie is simply returning to its uptrend.
Here’s one for countertrend traders! NZD/USD is testing a rising channel resistance on the 4-hour chart, which is convenient if you also look at the overbought stochastic signal. A short at current levels could make for a good trade if you believe that the Kiwi is set to fall against the Greenback. Be careful in trading against the trend though, as the strategy is not for everyone. Keep your stops 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.