USD/CAD looks like it’s back to re-test the rising channel resistance that it had broken earlier this month. What makes the setup more interesting is that the level also lines up with the Fibonacci retracement levels as well as the 100 SMA on the 4-hour time frame. What’s more, stochastic is flashing an oversold signal! A long trade around the Fib levels with stops below the SMAs is a good idea if you think that the dollar hasn’t finished doing a number on the Loonie. Just make sure you practice good risk management when you’re trading trend plays like this one!
Breakout alert! EUR/JPY has broken above the 116.50 minor psychological handle, and is now testing the 117.00 mark. Are we looking at an upside breakout for the euro? Or is it really a fakeout that will push the pair back to its medium term range? Read up on breakouts and fakeouts if you haven’t tried trading them. Anyway, stochastic is currently on the bears’ side with an oversold signal, but keep close tabs on this one in case it pops higher and manages to break above the July highs!
I spy with my cool, blue eyes a pullback play in the making! GBP/CHF is lollygagging just below the 1.2500 major psychological handle, which is right smack at a previous support area. Not only that, but it also lines up between the 50% and 61.8% Fib retracement levels on the daily chart! The cherry on top of this potential retracement setup is an overbought stochastic signal. Shorting at the first sign of bearish candles is a good idea if you think that the pound is in for more losses. But if you’re one of them pound bulls, then you might want to wait for a break above the Fib levels as well as the 100 SMA on the chart before putting on your long trade orders.
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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.