After spiking below the 101.50 mark yesterday, USD/JPY has clawed its way back up and is now trading around the 105.50 area. What makes the level interesting is that it’s near the 200 SMA as well as a previous support and resistance area from early May to late July. What’s more, it also looks like there’s a bearish divergence brewing on the daily chart. Is the 106.00 – 106.50 area a turning point for the dollar? Keep close tabs on this one in case the bears manage to defend the 200 SMA resistance!
EUR/GBP has shot up to the .9400 levels last month, but is now on track to retest the .8600 major psychological handle, which lines up with a 38.2% Fib retracement and a previous resistance on the daily time frame. Is the euro in for more gains against the pound? Buying the pair at the first bullish candlesticks around the 38.2% Fib is a good idea if you’re one of them euro bulls. Of course, you can also short at current prices and aim for an even deeper retracement to the .8400 levels if you think that the bears aren’t done doing their number on the pair just yet.
Here’s one for trend players out there! USD/CHF has managed to keep inside a rising channel on the daily time frame. Right now, the pair is lollygagging around the .9850 mid-channel resistance. There’s still room to buy the pair if the oversold stochastic signal and the SMA crossover on the daily chart are any indication. Just make sure you practice good risk management to maximize your reward-to-risk ratio, aight?
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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.