In yesterday’s intraday charts update, the pair was at 1.4240 and we were lookin’ to go short. Well, those of us who were gangsta enough anyway, since I told the more conservative traders out there to sit this one out. After all, shorting when the pair is near that there ascending channel’s resistance area is extra risky.
Anyway, I told y’all that the pair would likely be gunning for 1.4110. Well, the pair got there all right, and then promptly blew past that, reaching 1.4040 later. Know what that means, dawg? That’s right! 200 pips in just 24 hours! Aww, yea! We got bank, yo!
Moving on, the pair is now close to the channel’s support area. Moreover, stochastic has been signaling overbought conditions for a while. There’s therefore a good chance that the pair may move back up again. As such, y’all therefore better start lookin’ for opportunities to go long.
Given the strong bearish momentum, however, I highly advise that y’all wait for a bounce, or for support to hold, or for a reversal candlestick pattern to form (or all three) before going long. Furthermore, the strong downswing means that there’s a chance for a downside channel breakout. Do note, however, that 1.3880, not 1.4010, is the price area to watch for a breakout confirmation, since 1.4010 may now serve as support, given that it’s pretty close to the channel’s support area.
Back on Tuesday, we was expecting 112.30 to hold as resistance and that the pair would then shoot lower to 111.20. Well, check that out, dawg. As y’all can see, that’s exactly how price action played out, which means we’re 110 pips richer. Not as awesome as our setup for EUR/AUD, but good enough. Aww, yea!
Anyhow, 111.20 seems to be holding as support and stochastic is pointing back up again, so the pair will likely move up again to the channel’s resistance area. The pair has already moved a bit, though, so it may be too late for the more gangsta traders out there to jump in with a long. But for the more conservative traders out there, well, make sure to put this pair on your watchlist and be ready to start lookin’ for opportunities to go short. Just be ready to bail if the pair surges higher and breaks past 112.30, a’ight? Also, just make sure to practice proper risk management as always.
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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.