Last Friday’s Fibonacci setup on GBP/USD’s 1-hour chart got invalidated when the pair easily blew past the 61.8% retracement level. But if we reassess our charts, however, we can see that an ascending channel how now formed. Not only that, if we reapply our handy Fibonacci tool, we can see that price is close to the 50% retracement level. Furthermore, the pair is currently at the 1.2400 major psychological level. Stochastic, meanwhile, is already signaling oversold conditions. There is therefore a higher-than-average chance that support may form here. We have two problems with this chart, though. The first is that the momentum of the current downswing seems rather strong. The second problem is that price has been closing below the 100 and 200 SMAs. These two problems point to a possible downside breakout, so you may also want to consider such a scenario.
The counter-trend setup on EUR/CHF’s descending channel, also from last Friday, finally finished playing out today when the pair reached the 1.0760 handle. So for today’s play, we’re looking to go short on the pair, especially since stochastic is already pushing away from overbought territory. Moreover, the moving averages also appear to be acting as dynamic resistance. Of course, there’s always a chance the pair would move higher instead. After all, the pair is still some distance from the channel’s resistance area. Anyhow, just make sure to practice proper risk management, okay?
If y’all can still recall last Tuesday’s setup on AUD/NZD, one of our scenarios back then was a topside break past 1.0540. Well, that scenario played out beautifully because the pair moved 100 pips higher and is now milling about the 1.0640 handle. And for today’s play, we’ve got two new scenarios for the pair. The first is to go long on a clean breakout. As y’all can see on that there chart, the pair broke out of a descending channel and is now trying to break past the 1.0640 handle. The 1.0640 handle is a price area with very significant market interest, even on the higher time frames, so break past that would be significant. The second scenario, meanwhile, is to look for shorting opportunities if the 1.0640 handle holds as resistance. The moving averages seem to support the first scenario, given that they’re in uptrend mode. Stochastic is about to reach overbought territory, though, which supports the second scenario.
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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.