Sup, dawg? The pair finally broke higher from the symmetrical triangle pattern that we identified last Friday. As y’all can see, the pair broke to the upside, smashing past the key price area at 1.3980 that I told y’all about. Anyhow, if you were gangsta enough to jump in at the breakout point, then you probably have around 250 pips in the bag by now. Aww, yea! You da man, dawg! But if you were the more conservative type and waited for a clear break past 1.3980, then you still have 180 or so pips, which ain’t that bad. You still got bank, so live it up, homie!
Anyhow, stochastic is already indicating overbought conditions and all that. Plus, the pair appears to be hesitating at the 1.4150 minor psychological level. There’s therefore a chance that the pair may pull back down. So if you missed the breakout move, then you may wanna start lookin’ for an opportunity to go long. As to where the pair will likely pull back, the former resistance area at 1.4090 is the most likely candidate. Although there’s a small chance that the pair may pullback all the way to 1.3980, so you may wanna think about preserving some of your profits. Also note that if the pair goes beyond 1.3980, then it’s game over, man.
Our other symmetrical triangle for EUR/NZD, which we also identified last Friday, also broke to the topside. And similar to our triangle for EUR/CAD, EUR/NZD also smashed past the key area of interest at 1.4850. And if you was gangsta enough and all that, you’d be rolling around in your 280 pips right about now. But if you were the more conservative type, you still got around 200 pips, which is still a lot of pips. That’s right! Pretty sweet, huh? Aww, yea!
And like our setup for EUR/CAD, EUR/NZD has also reached an area of interest, namely the 1.5050 minor psychological level. In addition, stochastic is also indicating overbought conditions and all that. There therefore a chance that the pair may retrace. And if we apply our Fibonacci tool, we can see that the 38.2% and 61.8% retracement levels are retracement levels to watch, since they line up with the areas of interest at 1.4930 and 1.4850 respectively. A rapid break past 1.4850 likely means that them bears are trying to invalidate the pattern, though, so you may wanna bail by then, or even switch trading bias. In any case, just remember to practice proper risk management, a’ight? Peace!
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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.