First up is a simple support and resistance play on USD/CHF. The pair is currently testing the .9800 major psychological (MaPs) handle, which had served as resistance in Q3 2015 and support in Q4 2015 and Q1 2016. This time around stochastic is on the bears’ side with an overbought signal while the 100 and 200 SMAs could also limit the bulls’ moves. Think the dollar will bounce from the level? Shorting at current levels could make for a good trade if you place your stops just above the SMAs and aim for the previous lows. Of course, you could also wait for an upside breakout if you’re one of them dollar bulls.
Here’s one for the comdoll traders! After getting rejected at the .7340 area, AUD/USD looks set to fall to the .7250 level. What makes this setup interesting is that the minor psychological area lines up with a broken falling trend line on the daily time frame. Not only that, but stochastic is also almost in the oversold zone. Are we looking at a resistance-turned-support situation or have the 100 and 200 SMAs succeeded in blocking the bulls’ momentum?
If trading currency crosses is your thing, then you better take a look at this Fib action! GBP/AUD is having trouble breaking above the 1.9900 psychological handle that lines up with a 61.8% Fib on the daily chart. What’s more, it’s also testing the 100 SMA while stochastic is popping up an overbought signal. Shorting at the current levels could give you a good reward-to-risk ratio especially if you aim for the previous lows. Just make sure you leave a wide stop loss, aight? Currency crosses like this one tend to be more volatile than the majors!
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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.