Remember that channel resistance that we checked out earlier this week? Well, it looks like it caught the attention of forex bears! USD/JPY popped up to 118.50 but has since dropped to the 115.50 area. Talk about changing tides! This time around USD/JPY is chillin’ at the 115.50 MiPs, which lines up with the channel support on the 1-hour time frame. What makes this setup more interesting is that there’s also a bullish divergence on the chart. Think the dollar is about to gain pips on the yen? Buying at current levels is a good play if you’re into countertrend trading, but you could also wait for a retracement to the 116.00 or even the 117.00 area if you’d rather trade a downtrend.
If range trading is more your thing, then here’s a hot one for ya! USD/CHF is lollygagging at the 1.0100 major psychological handle, which isn’t surprising since the level has been an area of interest since late November. If the pair does bounce from the level, then you might want to look at the 1.0300 range resistance as a possible profit target. Don’t discount the 1.0200 mid-range resistance though, as dollar bears could also be waiting around the psychological level. In any case, make sure you manage your reward-to-risk ratio well when trading (seemingly) easy peasy setups like these.
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.