Breakout alert! If you’ve been watching the descending triangle that we checked out last week, then you should know that the euro is about to break below the pattern. Be careful in shorting this one though, since stochastic is chillin’ like a villain in the oversold territory. Playing a break-and-retest seems like the best play for this one if you’re not sure about the euro falling against the pound. Oh, and make sure you place wide stop losses for currency crosses like this one!
I spy with my blue, bedroom eyes a trend resistance in the making! USD/JPY is finding trouble breaking above a falling trend line, which lines up with the 100 and 200 SMAs on the 4-hour time frame as well as the 109.00 major psychological handle. Shorting at current levels could give you a good reward-to-risk ratio especially if you put your stop losses just above the trend line and aim for new lows. What do you think? Will the Greenback lose pips against the yen?
Here’s one for the countertrend traders! EUR/CHF is finding resistance at the 1.1050 area, which lines up with a mid-channel resistance on the 4-hour time frame. What makes this setup more interesting is that stochastic is sitting in the overbought region. Thinking of shorting this one? If you are, then you must note that countertrend trading isn’t for everyone. Of course, it won’t hurt if you have a solid trading plan before you put on your orders!
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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.