Trend warriors huddle up! EUR/JPY is lollygaggging just below 117.50, which isn’t surprising because the area is near a falling trend line resistance and a 200 SMA retest on the 4-hour time frame. What makes this setup more interesting is that there’s also a bearish divergence on the chart. Will the euro see more losses against the yen in the next few days? Keep in mind the yen’s tendency to be more volatile than the other major currencies if you’re planning on trading this one!
Here’s one for the dollar bulls! USD/CAD is having trouble breaking below the 1.2900 major psychological area, a level that’s also right smack in the path of a rising trend line on the 4-hour chart. What’s more, stochastic has also just reached the oversold area and it looks like it’s about to go up. Buying at current levels could get you a good trade especially if you aim for the 1.3100 resistance. Not all ascending triangles like this one break to the upside though, so you might want to keep a close eye on your long trade in case the Loonie bulls come charging in!
Support alert! GBP/AUD is about 200 pips away from the 1.7350 handle, an area that has served as resistance and support since 2013. Stochastic is also showing an oversold signal, which could attract more bulls over the next couple of days. A long trade at current levels with stops just below the major support could still give you a good reward-to-risk ratio. Just be vigilant over the Fib retracement levels, okay? We might be looking at a retracement instead of a bounce!
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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.