First up is a nice and simple mid-channel trade on EUR/USD. The pair is lollygagging just above the 1.1250 mid-channel area, which is also near the 100 and 200 SMA on the 1-hour chart. Not only that, but stochastic is also hanging out at the overbought region. Think the euro is about to see more losses against the Greenback? Or can the bulls push the pair to 1.1300 before we see any weakness? Keep close tabs on this one!
Range traders huddle up! GBP/JPY is 200 pips away from the 162.00 major psychological handle, which has been an uncontested resistance area since mid-February. Stochastic is also on the bears’ side with a potential bearish divergence in the making. A short trade at current levels could still get you a good reward-to-risk ratio if you aim for the previous lows. If you want to be more conservative with your entry though, then you can also wait for an actual retest of the 162.00 handle before you jump in.
Here’s another one for the trend traders! GBP/CAD is consolidating at the 1.8350 area, which is right smack at a falling channel resistance and 100 SMA on the 4-hour time frame. What makes this setup more interesting is that stochastic is also sporting an overbought signal. A short trade at current levels could make for a good trade if you place your stops above the channel and aim for the pair’s previous lows. Just make sure you leave enough room for currency cross volatility!
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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.