Let’s start with a simple range play on EUR/USD. The pair is currently lollygagging just above the 1.0550 minor psychological handle, which isn’t surprising since it’s also right smack at a mid-range support on the 1-hour time frame. Reward-to-risk ratios look pretty even for forex bulls and bears at the moment, so you’ll have to get crafty with your risk management strategies to get a good trade. If you’re one of them conservative traders though, then you could also wait for the pair to hit either the range support or resistance to get better risk ratios for your trades.
Here’s one for the trend playas out there! AUD/CAD is finding buyers just above the 1.0200 area, which is right at a mid-channel support on the 1-hour time frame. What’s more, it’s also just above the 100 and 200 SMA support on the chart! Buying at current levels could still get you sweet pips especially if you think that the Aussie will hit new highs against the Loonie. Meanwhile, conservative traders can also wait for the pair to drop down to the 200 SMA or channel support area for better reward-to-risk ratios. In any case, make sure you don’t place your stops too near your entries, as currency crosses like these tend to see volatility like nobody’s business.
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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.