First up is a nice and simple trend play on AUD/USD. The pair is about to hit the .7650 area, which ines up with not only the top of a descending channel, but also the 100 and 200 SMA resistance. What’s more, stochastic is flirting with the overbought territory. A long trade at the resistance area could get you a good reward-to-risk ratio especially if you think that the Aussie is in for more losses against the dollar. Of course, you could also wait for a break above said resistance levels and trade an upside breakout if you’re one of them Aussie bulls.
Here’s another one for trend traders out there! GBP/JPY is forming what looks like a rising wedge on the 1-hour time frame. As the School of Pipsology teaches us, patterns like these usually mean pauses in a current trend and could either serve as continuation or reversal signals. Will this lead to more losses for the pound? A breakout from the pattern can be as strong as the height of the wedge, so keep an eye out in case we see breakouts in either direction!
Last one for this set of setups is a classic break and retest scenario on AUD/CAD’s 4-hour time frame. After finding support at the .9785 area, the pair looks set to test the .9900 major psychological level that’s right smack on a 38.2% Fib resistance and 100 and 200 SMAs. The cherry on top of the setup sundae is an almost overbought stochastic signal. Shorting at the .9900 area could make for a good trade if you think that the Aussie is in for more losses against the Loonie. Just make sure you practice good risk management when trading currency crosses like these!
Forex Chart Settings:
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.