Day traders huddle up! GBP/CAD has found resistance at the 1.6550 minor psychological handle, which is right smack at the 50% Fibonacci retracement AND the 100 SMA on the 1-hour time frame. Not only that, but the level also lines up with a falling trend line resistance on the chart. The cherry on top of the potentially bearish sundae is stochastic hanging out at the overbought territory. Think the pound is in for more losses against the pound? Time to bust out your trend-trading strategies and make trading plans for this one!
Here’s another trend play for ya! GBP/AUD is lollygagging at the 1.6900 major psychological handle, which lines up with a 100 SMA retest on the 1-hour time frame. What’s more, it’s also sitting on a rising trend line support that hasn’t been broken since late October. A long trade at current levels would give you a good reward-to-risk ratio especially if you aim for new highs. Don’t choke your stop losses too much though, as currency crosses like this one tend to see more volatility than the majors.
If comdoll trading isn’t really your thing, then you might want to take a look at this position trade opportunity on EUR/GBP. The pair is back at the .8400 – .8300 area, which is right around where the 61.8% Fibonacci retracement and 200 SMA are on the daily time frame. The rising trend line support is also intact, which might get the attention of some euro bulls. Buying at current levels is a good idea if you think that the euro is in for more gains against the pound. But if you think that the lack of upside momentum is pointing to more losses for the common currency, then you could also wait for the pair to break below the trend line and trade a possible downside breakout.
Forex Chart Settings:
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.