Dollar warriors huddle up! USD/JPY is having trouble breaking above the 103.50 minor psychological handle, which is near the top of a range on the 1-hour time frame. The area has also been serving as an area of interest since mid-June, so expect to see more than a couple of forex bears defending the level. Shorting at current levels could get you a good reward-to-risk ratio especially if you think that the dollar would revisit the 100.00 mark some time this week. Just make sure you practice good risk management!
Here’s one for the trend traders out there! GBP/NZD is currently testing the 1.7750 minor psychological area, which lines up with a falling channel resistance as well as the 100 and 200 SMAs on the 1-hour chart. What’s more, stochastic is chillin’ like a villain on the overbought territory. Think the pound is about to lose more pips on the Kiwi? Stops just above the channel could make for a decent downtrend trade, especially if you aim for the previous lows around the .7400 handle. Don’t use uber tight stops though, as currency crosses like this one tend to be more volatile than other major currency pairs.
Last one up for this batch of charts is another trend trade, this time on NZD/USD’s daily chart. The pair is testing the limits of its rising channel support, which is also near a 100 SMA retest and the .7150 minor psychological handle. Buying at current levels could make for a good trade especially if you place your stops below the 100 SMA and aim for the previous highs. Of course, you could also wait for a couple more candlesticks to confirm a bounce if you’re not too sure about the continuation of an uptrend right now.
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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.