EUR/USD has been trading higher real nice while inside that there ascending channel. As y’all have been hearin’ from me, one of the more conservative ways to play an ascending channel is to look for opportunities to go long when the pair is near the channel’s support. And would ya look at that? That’s where price is currently at, so y’all better start lookin. And all the more so, since the channel’s support area lines up rather nicely with the area of interest at 1.0710. In addition, stochastic is already indicating oversold conditions and all that.
Resistance at 1.0790 seems rather strong, though, so much so that the pair was unable to quite reach the channel’s resistance area. Y’all therefore better keep an eye on how the pair reacts to 1.0790. Also, since them bears have entrenched themselves at 1.0790, y’all may also wanna consider the possibility of a downside channel breakout. If such a scenario plays out, then the pair needs to clear 1.0660 with great momentum. Otherwise, there’s a chance that bulls will fight back and push the pair back into the channel.
We’ve got us another channel for yet another euro pair. This time, we’ve got a descending channel for EUR/JPY. Well, the channel is actually only a potential descending channel at this point. Just keepin’ it real, dawg. The pair needs to move back up first before the potential channel is validated. And finding a long here in the assumption that the channel would get validated is today’s play.
By the way, going long here is a counter-trend setup and extra risky. More conservative forex traders may therefore wanna sit this one out for a while until the pair does reach the channel’s resistance area. But for the more gangsta forex traders out there, just know that stochastic is already signaling oversold conditions, which may entice them bulls to jump in soon. Also, know that there’s a chance that the pair may not reach the channel’s resistance area. Why? Well, as y’all can see, the 121.70 handle is close by. And 121.70 is a price area with very strong market interest, even on the higher time frames. And if we use our Fibonacci tool, we can also see that 121.70 sits right smack on the 50% retracement level. Also, the moving averages may act as dynamic resistance if or when the pair does get there. In any case, just make sure practice proper risk management, a’ight?
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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.