Let’s start by revisiting yesterday’s channel setup for USD/JPY. And as y’all can see, the pair moved about 140 pips higher from last we saw it. The pair then tested the channel’s resistance before sliding about 100 pips lower. By the way, congratulations if you were able to ride either (or both) swings. Okay, going back to today’s play, the pair is presently bouncing off the channel’s support area. Y’all therefore better start looking for opportunities to go long. And all the more so, since stochastic is about to reach oversold territory. Do note, however, that there is always a chance that the pair may stage a downside breakout instead, so always make sure to practice proper risk management, alright?
Price action on CHF/JPY is actually kinda similar to that of USD/JPY. And like USD/JPY, we can also clearly see that an ascending channel pattern has formed. Currently, the pair is making its way down towards the channel’s support area. Moreover, the 100 SMA is lined up rather nicely with the channel’s support area, and may even act as dynamic support. Also, stochastic is just about to indicate oversold conditions. Chance is therefore better-than-average that support may form, so y’all better get ready.
An ascending channel has also formed on EUR/JPY’s 1-hour chart, but this one is a bit more complicated than the others. As y’all can see on that there chart, the pair seems to have difficulty moving past resistance at 117.40. Also, the pair’s latest failed attempt to break past 117.40 has caused the pair to retreat, with 116.30 being the likely pullback area.
If or when the pair does get to 116.30, then chances are good that support will form there. After all, 116.30 is a price area with significant market interest, even on the higher time frames. Moving on, the 116.30 handle would be near the channel’s support area, which is another technical argument for support to form there. However, given that stochastic is about to reach the oversold area, there’s also a chance that bulls may get their second wind before reaching 116.30. If that happens, then the bulls will likely have another go at 117.40, so prepare for such a scenario as well.
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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.