I spy with my cool, blue eyes a support-turned-resistance trade in the making! After finding support at the .7300 area, AUD/USD looks like it’s now gunning for the .7600 major psychological (MaPs) area. What makes the level more interesting is that it lines up with the 100 SMA and a trend line support that was broken earlier this month. Right now the Aussie is having a bit of trouble breaking past the .7500 MaPs, which isn’t surprising since it’s also near the 38.2% Fibonacci retracement and the 200 SMA. Will the Aussie see another leg lower this week? Shorting around the Fib levels is a good idea if you think that the Greenback will soon step up its game against the Aussie. If you’re one of them Aussie bulls though, then you can wait for a break above the broken trend line before putting on your buy orders.
Remember that trend play that we spotted a couple of days ago? Well, it looks like we’re gonna see a bounce after all! GBP/JPY just got rejected at the 140.00 MaPs, which is right smack at a falling trend line resistance that hasn’t been broken since November 2015. Not only that, but the 200 SMA on the daily chart is also hovering just above the 140.00 mark. Think the pound will soon go back to its downtrend against the yen? Shorting at current levels would give you a sweet reward-to-risk ratio especially if you aim for the previous lows. Just remember to place wide stops, aight? Yen crosses like this one tend to be more volatile than the majors!
Here’s another one for the trend warriors out there! EUR/GBP is lollygagging around the .8550 handle, which isn’t surprising since it lines up with a 50.0% Fib retracement and a previous area of interest. What’s more, stochastic is chillin’ like a villain on the oversold territory! A long trade at current levels is a good idea if you think that the euro will gain pips on the pound some time this week. If you’re looking for a more conservative entry though, then you can also wait for a test of the .8300 MaPs, which is nearer to the rising trend line and 200 SMA on the daily time frame. Whichever strategy you choose, make sure you practice good risk management when you trade!
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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.