Remember that falling channel play that we spotted a couple of days ago? Well, it looks like euro bulls have hustled enough muscle to push it back up to the pattern’s resistance!
The pair is currently trading around the .8875 area, which is right below the 200 SMA on the 1-hour chart as well as right smack at the channel’s resistance area. Oh, and check out that bearish divergence forming on the chart!
Shorting at current levels is a good play if you think that the euro will revisit its March lows against the pound. Just make sure to practice good risk management and you’ll likely bag a pip or two (or fifty) from this hot setup.
If comdoll trading is more your thing, then this one’s for you! EUR/AUD is fast approaching the 1.4250 level, which lines up with a psychological support area from the last quarter of 2016.
This time around the level also marks the retest of a falling trend line that hasn’t been broken since April 2016. Not only that, but it’s also sitting just below the 61.8% Fibonacci retracement AND 200 SMA on the daily time frame.
Shorting around the area could get you decent reward-to-risk ratios especially if you place your stops just above the trend line. Don’t choke your stops though! Trading currency crosses and longer-time frames like this one means that you’ll likely see more volatility than your usual day trade on the majors.
Forex Chart Settings:
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.