Remember that falling channel that we checked out a couple of days back? Well, the channel is still intact! What’s more, it looks like there might be another chance to play the technical setup. USD/CHF is headed for parity, which is right around the falling channel resistance as well as the 100 and 200 SMAs on the 1-hour time frame. Not only that, but stochastic is also about to hit the overbought territory. Shorting arround the 1.0000 – 1.0050 area is a good idea if you think that the dollar’s downtrend will persist. If you’re one of them dollar bulls though, then you could also wait for a break above said resistance levels and trade and upside breakout.
Pullback alert! GBP/AUD is lollygagging at the 1.6500 – 1.6550 zone, which isn’t surprising since it lines up with an area of interest, Fibonacci retracement levels, and the 100 SMA on the 4-hour time frame. Oh, and look at that divergence action in the making! Think the pound is about to lose more pips against the Aussie? Shorting at current levels could get you a sweet reward-to-risk ratio especially if you aim for the pair’s previous lows. Don’t choke your stops though, as currency crosses like these tend to be more volatile than the major dollar pairs. Make sure you practice good risk management habits, aight?
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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.