This here is the updated chart from yesterday’s bounce-from-support setup on EUR/GBP’s 1-hour forex chart. First of all, congratulations to those who found a trade based on yesterday’s setup; I’m sure you’re happy with your 70-80 pips. For those who missed the ride, worry not because we may have another potential setup today since price has just reached a price area of very significant market interest, and stochastic is already pointing down after reaching the overbought region.
The moving averages are also moving closer together for a potential cross-over into downtrend mode, and the 100 SMA appears to be acting as dynamic resistance as well. There’s a chance that price will try to make a push for the 0.7150 minor psychological level, though, since the bullish momentum seems to be pretty strong.
I’ve got a trading range lined up next. GBP/USD has been consolidating inside a 110-pip trading range on the 1-hour forex time frame, with resistance at 1.5670 and support at 1.5560. Price is currently at the resistance area and hesitating, so a selling opportunity may be present there if resistance does hold. As a confidence booster, stochastic is already indicating potentially overbought conditions, so forex traders bearish on the pair may be taking over soon.
After breaking out to the downside from an ascending channel, EUR/USD moved hard and fast until the pair got rejected at the 1.0900 major psychological area. The rejection was so strong that price was kicked back to the bottom of the channel. But the bullish momentum was not enough to push price back into the channel, so perhaps seller interest is building up.
Looking at the chart, price is currently at the 1.1080 handle, a price area of major market interest in the recent past. Stochastic is also currently in overbought territory, so forex traders bullish on the pair may be exhausted already. If resistance does form here, then the sellers will probably be gunning for the support area at 1.0900, although the 1.1000 major psychological area could be a target too.
As usual, make sure to practice proper risk management should you find a trade based on any of these charts.
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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.AUD/CAD 1-hour Forex Chart