It’s the gift that keeps on giving! If you traded the countertrend setup that we were looking at last week, then you would have booked a good number of pips. This time around, USD/JPY is back at the 117.00 major psychological area, which is right around where the falling channel resistance and 100 and 200 SMAs are on the 1-hour time frame. Think the dollar will maintain its downtrend this week? Time to bust out your trend trading strategies and make plans for this setup! Just remember that yen pairs tend to be volatile, so make sure you don’t use stops that are too tight!
Here’s another one for trend junkies out there! USD/CAD is about to hit the 1.3200 major psychological handle, which is right smack at a rising channel support on the 4-hour time frame. Stochastic has also just taken off from the oversold region, so the bulls still have some room for an upside momentum. Be careful of the mid-channel resistance around the 1.3500 MaPs area though, as the chart above has shown that dollar bears tend to take advantage of the mid-channel area, too. In any case, a stop loss just below the channel could get you a pretty decent reward-to-risk ratio especially if you practice good risk management.
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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. These are some of our favorite books if you want to get in deeper with price action analysis & charting tools. BabyPips.com receives a small credit from any purchases through the Amazon links above to help support the free content and features of our site…enjoy!