I spy with my cool, bedroom eyes a tug-o-pip in the making! After breaking above a falling channel on the 1-hour time frame, USD/CAD looks set to retest the 1.3000 major psychological (MaPs) handle. On one side the bulls have an SMA crossover and the beginnings of a rising trend line. Meanwhile, the bears have the MaPs and the bearish divergence signal on their side. Who will win this battle? A long trade at the break above the 1.3000 handle could make for a good trade if you’re bullish on the dollar. Of course, you could also wait for a rejection at the closely-watched handle if you’re one of them dollar bears.
Cable is lollygagging just above the 1.4400 MaPs, which also lines up with a 50% Fib on the 1-hour time frame. In addition, stochastic is flashing an oversold signal for the bulls. Don’t get too confident about buying this pair, though! The 100 SMA has just crossed below the 200 SMA, which could signal a potential downtrend. Which way will the pair go? However you want to play this one, make sure that you have your plans and strategies loaded in your trading plan!
Ready for some more Fib action? AUD/USD is having trouble breaking below the .7350 psychological area, which is right smack at a 50% retracement and a 100 SMA retest on the daily time frame. What makes this setup more interesting is that there’s also an oversold stochastic signal on the chart. A long trade at current levels could get you a good reward-to-risk ratio if you’re one of them Aussie bulls. Of course, you could also wait for a break below the Fib levels if you think that the Aussie isn’t done falling just 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.