Remember that rising channel play that we spotted a couple of days back? Well, it looks like it worked out well for the bulls! This time around USD/CHF is lollygagging around the .9950 minor psychological handle, which lines up with the channel’s resistance. Not only that, but stochastic is chillin’ like a villain on the overbought territory. Is the Greenback in for losses against the franc? Or will the bulls power through and inspire an upside breakout? Shorting at current levels would give you a good reward-to-risk ratio especially if you aim for the channel’s support. Just make sure that countertrend trading is for you, aight?
Here’s one for the trend playas out there! EUR/GBP is pausing around the .8600 major psychological handle, which is right smack in between the 38.2% and 50% Fibonacci retracement levels, as well as a previous resistance area and the 100 SMA on the daily time frame. The cherry on top of this sweet setup is an oversold stochastic signal. Buying around the Fib levels is a good idea if you think that the euro will head back to its previous highs. Keep your stops wide though, as crosses like these usually show more volatility than the majors!
It’s clobberin’ time! Pound bears must be feeling fantastic right now that GBP/AUD is bouncing from the 1.6750 handle. As you can see on the chart, the level lines up nicely with not only the 50% Fib, but also a previous support on the daily time frame. On top of that, stochastic has also just flashed an overbought signal! Before you sell this baby like there’s no tomorrow though, you should know that the pair could still tap the 1.7000 major psychological handle near the 61.8% Fib and 100 SMA before heading down. Just something to think about if you’re trading this setup!
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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.