Cable looks like it has bounced from the mid-channel level, which also happens to line up with the 1.2600 major psychological handle and the 200 SMA on the 1-hour time frame. Will we see the pound bounce higher against the Greenback? Or will the bears hold their fort and force a trip back down to the 1.2500 channel support? Buying at current levels is a tricky decision at this point especially if you’re only aiming for the previous highs. Don’t let that scare you though! As long as you stick to your trading plan and practice good risk management, then you’ll have a pretty good chance at coming out of the trade with profits.
Breakout alert! AUD/NZD has just broken below the 1.0400 psychological handle, which has also served as a descending triangle support on the pair’s 4-hour time frame. As the School of Pipsology tells us, triangle breakouts like these could be as wide as the start of the consolidation, which is around 300 pips in this case. Time to bust out your breakout strategies, brothas! Just remember to use wide stops, aight? Currency crosses like these usually see more volatility than the majors, after all.
Remember that trend play that we were looking at a couple of days back? Well, it looks like euro bulls aren’t waiting around for a trend line retest! EUR/GBP found support at the .8350 area, which isn’t surprising since it also lines up with a support level from June and July. Not only that, but it’s also right smack at a 50% Fib retracement as well as a 200 SMA retest. Is the euro about to see more gains against the pound then? Buying at current levels is a good idea especially if you aim for the previous highs and place your stops just below the trend line. Watch this one closely, folks!
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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.