If y’all can still recall, we originally had a Fibonacci retracement setup for EUR/USD way back on February 17. And back then, we was lookin’ to short when the pair was at 1.0660. Also, we had our eyes on 1.0590 and 1.0530. Well, as y’all can see, the 1.0660 handle held as resistance and the pair dropped lower. Moreover, the pair easily cleared 1.0590, but finally lost momentum when it found buyers at 1.0530. Anyhow, pretty decent setup, so give yo self a pat on the back for getting between 70 to 130 pips. Aww, yea!
Anyhow, if we take the most recent price action into consideration, we can see that a fresh descending channel appears to have formed. The pair could still potentially go lower, since it hasn’t reached the channel’s support area at 1.0460 yet. However, as y’all can see, 1.0530 has a lot of bullish interest. Moreover, stochastic is already indicating oversold conditions and all that. As such, there’s a good chance that the pair may climb higher. And them bulls will likely be gunning for the areas of interest at 1.0590 and 1.0660. And between the two areas of interest, 1.0590 seems the most likely target area, since it lines up with the channel’s resistance area. Oh, just note that this play is only for the more gangsta traders out there. For the more conservative forex traders, y’all may wanna wait until the pair reaches 1.0590 and finds resistance there before goin’ short. Also, remember to always practice proper risk management, a’ight?
We’ve been playing that there descending channel for EUR/JPY since February 6. And last time we checked up on the pair was on February 22. And back then, the pair was testing the channel’s support area around the 118.60 handle. In addition, we had two setups in mind back then. The first was a conservative pullback scenario where we wait to short when the pair reaches 120.30. And our second setup for the gangsta traders out there was to ride the pullback by going long at or near 118.60. Well, that second aggressive setup played out real well, since 118.60 held as support and the pair is about to reach the 120.30 handle. So for those of ya who were gangsta enough to go long, give yo self a nice pat on the back for catching some decent pips. You’ve got bank, dawg!
And since the pair is just about to reach 120.30, and stochastic is signaling overbought conditions and all that, might as well put our original pullback scenario into play, right? Y’all therefore better start lookin’ for opportunities to go short if the pair reached 120.30 and the price level holds as resistance. Just note that there’s also a small chance that the pair may attempt an upside breakout, so just be ready to bail or even switch trading bias if the pair smashes past 121.70 on good momentum.
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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.