After breaking below a rising channel and falling to as low as the .7475 area, AUD/USD has retested the channel’s support near the .7500 major psychological area. Are we looking at a fakeout in the making or is it a break-and-retest scenario? Stochastic is about to hit the overbought territory, so you might want to keep an eye out for more downside moves. Of course, you could also prepare for a pop higher in case the bulls gain momentum today.
Here’s a simple trend play for ya! EUR/NZD has just bounced from the 1.5600 area, which was right smack at a rising trend line on the 1-hour chart. It also didn’t hurt that the 100 SMA was chillin’ like a villain just below the trend line support. The cherry on top of this bullish sundae is an oversold stochastic signal that looks like it’s about to go up. Think the euro is in for more gains against the Kiwi? Keep close tabs on this one, folks!
Position traders huddle up! AUD/NZD is having trouble breaking above the 1.0700 major psychological handle, which lines up with not only the 38.2% Fib on the daily time frame, but also a solid support that had been solid for at least a year and a quarter before it was broken. What’s more, stochastic has just visited the overbought territory. A short trade at current levels could get you a good reward-to-risk ratio especially if you place your stops just above the Fib levels and aim for the previous lows. Just make sure to stay more vigilant with your risk management practices when trading crosses like this one!
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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.