What we have here is a rather messy-looking ascending channel. And as I keep repeating like a broken record, one of the more conservative ways to play an ascending channel is to look for opportunities to go long near the channel’s support area, which means that more conservative forex traders may wanna avoid this one for now since the pair is currently moving down after bouncing off the channel’s resistance area. For the more aggressive forex traders out there, just know that the pair is already hesitating and the 100 SMA seems to be acting as dynamic support, plus stochastic is already close to reaching the oversold region, so buyers may start jumping in soon. Again, such a setup is a bit risky, so make sure to practice proper risk management.
EUR/USD has been trading sideways while respecting resistance at the 1.1150 minor psychological level and support at the 1.1030 handle, giving us a 120-pip trading range or rectangle. Price recently bounced off the rectangle’s resistance area, but it hasn’t made its way halfway down to the support area yet, so you better decide quick if you plan to trade within the range by going short. If you think it’s already too late, then you have to wait until the pair reaches the rectangle’s support area before you can find another setup.
Is NZD/JPY in for more moves to the upside? Well, there’s a good chance that the pair will continue moving higher since what appears to be a bullish flag has now formed on its 1-hour chart, and the moving averages have crossed-over into uptrend mode to boot. If an upside breakout does occur, then the pair could shoot higher for a whopping 530 pips, based on the height of the flag and its pole. Stochastic is pointing down and moving away from overbought territory, though, so it may not yet be time for a bullish breakout, but make sure to keep an eye out.
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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.