Last Friday, we discovered that there ascending channel for GBP/USD. Back then, the pair was close to the channel’s support area at 1.2470. And since then, the pair has moved higher for over 130 pips. Aww, yea! 130 pips over the weekend. Not bad, not bad. Heck, the pair even blasted through the key price area at 1.2510 that I told y’all to keep an eye on.
Anyhow, the pair looks like it could still go higher. However, the pair also appears to be hesitating at the mid channel area. Moreover, stochastic is already signaling overbought conditions and all that. There’s therefore a good chance that the pair may began pulling back to the channel’s support area. Y’all therefore better put this pair on your watchlist.
Do note, however, that there’s a small chance that the pair could go all the way down to 1.2510. Y’all may wanna bail or even switch to a bearish bias if the pair goes even further than that on strong momentum, though. And all the more so if the pair smashes past 1.2390.
I dunno if y’all can still recall, but back on March 21, we had a Fibonacci retracement setup for CHF/JPY. Back then, we was lookin’ to go short on the pair since the 38.2% retracement level around 113.20 seems to be holding. Also, we was expecting the pair to gun for 112.30 and then 111.20.
As it turns out, the pair did move lower and cleared 112.30. However, fresh bulls came in, so the pair failed to reach 111.20. We’re still bearish on the pair, though, especially since them moving averages are already in downtrend mode while stochastic is indicating overbought conditions and all that. Moreover, if we take the most recent price action into account, we can see that a fresh descending channel has formed. And as it turns out, the pair is close to the channel’s resistance area, which happens to be just above the area of interest 112.30. There’s therefore a higher-than-average chance that the pair may continue moving lower.
As usual, though, just make sure to practice proper risk management, a’ight? Also, just be ready to bail if the pair moves higher past 113.20, since that would confirm an upside channel breakout. Although such a scenario appears rather unlikely for now.
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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.