First up is a nice and simple range play on USD/JPY. The pair got rejected just below the 115.00 handle last week, which isn’t surprising since it’s right smack at a range resistance that hasn’t been broken since the start of the year. Be careful in shorting this one though! The 114.00 psychological level lines with the mid-range support AND the 100 and 200 SMAs on the 4-hour time frame and could provide some challenge for forex bears out there. Still, stochastic has just left the overbought territory so we might see a bit more bearish momentum before the pair bounces back up. Watch this one closely, fellas!
Here’s another range setup for ya! NZD/JPY looks like it has just broken below a “double top” that had formed right around the 82.75 range resistance area. The 100 SMA is providing challenge for the Kiwi bears right now, but a break below the level could lead to a retest of the 78.00 mid-range support if not the 73.00 range bottom. Shorting at a break below the SMA is a good idea if you think that the Kiwi will continue to lose pips against the yen. But if you’re one of them yen bears or Kiwi bulls, then you could also wait for a retest of the support levels that we’ve identified before jumping on a possible bounce. In any case, make sure you’ve got potential scenarios mapped up in your trading plans before you put on your trading orders!
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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.