Triangle alert! As y’all can see, USD/JPY is bouncing along a possible descending triangle on the chart. Conservative traders can make a play for the 113.50 area, which is right where the triangle resistance and 100 and 200 SMAs are on the 1-hour time frame. If you’re one of them hardcore dollar bears though, then you could also watch out for a possible bounce from current prices. See, the 113.00 handle is already an area of interest while stochastic is already signaling an overbought situation. Whichever play you choose, make sure you practice good risk management habits before you place your orders. Gotta protect your account, right?
Here’s one for the dollar bulls out there! EUR/USD is having trouble breaking above the 1.0800 handle, which isn’t surprising since the area of interest lines up with a 50% Fibonacci retracement as well as the 100 SMA on the daily time frame. What’s more, there’s also a little bearish divergence action that’s forming on the chart! Shorting at current levels could get you a sweet reward-to-risk ratio especially if you aim for the previous lows. Don’t choke your stops though, as the dollar hasn’t been the most predictable currency these days. Don’t forget to use wide stops on long time frames like this one!
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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.