EUR/USD is about to retest the 1.1200 major psychological level, which is near the 100 SMA on the 1-hour time frame. What’s more, it also lines up with a falling channel resistance that’s been holding since mid-May. Stochastic hasn’t quite reached the overbought territory, but it looks like it’s getting there. Will the bears succeed in defending the channel resistance?
Breakout alert! USD/CAD has just broken below a rising channel on the 1-hour time frame. What makes this setup more interesting is that it’s currently being supported by the 200 SMA on the chart as well as the 1.3000 major psychological level. Oh, and stochastic is chillin’ at the oversold area! Are we seeing a breakout or a fakeout? A long trade at current levels could give you a decent reward-to-risk ratio especially if you aim for the previous highs. Of course, you could also wait for a break below the 200 SMA if you think that we’re looking at a legit breakout.
Here’s one for the dollar bears out there! USD/JPY is back to testing a falling trend line that’s been holding since early March. This time around stochastic has also just touched the overbought levels. Think the Greenback is about to see losses against the yen? A short trade at current levels could make for a good trade setup if you believe that the dollar is headed for its previous lows. Be careful of the SMAs trading just below the price action though, as they could limit the dollar’s losses. Also, take care to place your stops well above the trend line! Yen pairs tend to be more volatile than the other majors after all.
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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.