Let’s start the day with a double bottom in the making. For the third time this month, USD/JPY saw a bounce at the 108.00 major psychological level. If the bulls have indeed defended the level successfully, then we might be looking at a reversal in the making. As the School of Pipsology taught us, a double bottom break can pop as much as the distance between the bottoms and the neckline. In this case, it’s around 150 pips. Think the dollar is about to bounce higher?
Here’s one for countertrend traders out there! NZD/USD is about to hit the 7.000 mark, which is also near the rising channel resistance on the 4-hour time frame. What’s more, Stochastic is also in the overbought territory. A short at the resistance area could make for a good trade, while the bulls can wait for an upside breakout before placing orders. Be very sure you’re up for countertrend trading if you haven’t tried it yet!
Last one up for this update is a simple support play on EUR/GBP. The pair is having trouble breaking below the .7900 major psychological handle, which isn’t surprising since it’s been an area of interest since mid-February. What makes this setup more interesting is that price is also near the 200 SMA just as stochastic is almost at the oversold region. The bulls can wait for a couple more bullish candlesticks before buying the pair while the bears can also wait for a break below the support levels before making short trades.
Forex Chart Settings:
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.