If y’all can still recall, we had a Fibonacci setup for AUD/USD way back on March 2. And back then, the pair was close to the area of interest at 0.7560, and we was expecting the said area of interest to hold as support. Also, we expected the pair to pull back all the way to 0.0.7620.
Guess what, dawg! That’s exactly how price action played out! Aww, yea! Anyhow, 0.7620 held as resistance, and so the pair dropped 130 pips all the way to the next area of interest at 0.7490. By the way, give yo selves a pat on the back if you was able to ride the pair all the way down.
Okay, if we take the most recent price action into account, it looks like the pair has formed a fresh descending channel. And presently, the pair is at the channel’s support area. There’s therefore a chance that the pair move back up again. Also, if we apply our Fibonacci tool, we can see that the 50% retracement level is the pullback area to watch. After all, it sits right smack on the former support area at 0.7560. Moreover, if or when the pair does get there, them moving averages would also get to act as dynamic resistance. Know what I’m sayin?
More gangsta forex traders may even profit both ways by lookin’ for an opportunity to go long now and then switching bias and lookin’ for shorts later. More conservative forex traders should wait until the pair pulls back, though. And all the more so, since stochastic is about to reach overbought territory, which means that there’s a chance that the pair could continue moving lower, or even stage a downside channel breakout.
Are y’all up for another channel setup? I hope y’all are, ‘coz I’ve got another descending channel for NZD/CAD. Well, that’s actually only a potential descending channel. I say “potential” because the pair has to climb all the way up to the channel’s resistance area in order to confirm it.
With that said, today’s main play is to look for opportunities to go long on the pair. Same reminder as the one I gave for AUD/USD applies, though, so only the most gangsta forex traders should even consider finding opportunities to go long here. But for the more gangsta forex traders out there, y’all may wanna wait until the pair clears the area of interest at 0.9350 before goin’ long. After all, stochastic is already indicating overbought conditions and all that. Also, the 100 SMA could potentially act as dynamic resistance. And as usual, just remember to make sure to practice proper risk management, a’ight?
Forex Chart Settings:
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.