“Resistance is futile!” At least that’s what euro bulls are hoping for now that they’re testing the 116.50 range resistance. Thing is, the bulls haven’t broken above the level since mid-July, and a bearish divergence on the 4-hour chart is attracting even more bears. Think the euro is about to see more losses against the yen? Shorting at current levels has the best reward-to-risk ratio if you’re one of them euro bears. If you’re one of them bulls though, then you can wait for a break above the 116.50 psychological handle before putting on your buy orders.
Here’s one for the trend warriors out there! GBP/JPY looks like it’s shrugging off the 100 SMA resistance on the daily time frame. If you’re a pound bear or a yen bull, then you might want to watch out for the 114.50 levels instead. The 114.50 area not only lines up with a falling trend line that hasn’t been broken since November last year, but it’s also near a 200 SMA retest as well as a previous resistance area. Watch the level closely for any signs of trend continuation!
GBP/AUD is almost at the 1.6750 minor psychological area, which is right smack at a 50% Fib resistance on the daily time frame. What makes the level more interesting is that it also lines up with a support bounce level from early August. The cherry on top of this potential bearish sundae is an almost overbought stochastic signal. If you think that the bulls could still break above the 1.6750 area before seeing bearish momentum though, then you can also wait around at the 1.7000 major psychological level, which lines up with the 61.8% Fib and the 100 SMA on the daily time frame.
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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.