Range traders huddle up! GBP/USD is a couple of pips above the 1.2150 minor psychological handle, which has been serving as range support since mid-October. What makes the setup more interesting is that stochastic is popping up an oversold signal. Think Cable is in for a bounce? Buying at current levels could get you a pretty good reward-to-risk ratio especially if you place your stops just below the range support. Just make sure you practice good risk management when you’re trading this day trade setup!
GBP/CAD: 4-hour Forex Chart
Remember that Fib play that we spotted a couple of days back? Well, it looks like GBP/CAD is having trouble going all the way back to its 61.8% Fib retracement. Pound bears are holding the fort around the 1.6300 major psychological handle, which is just below the 38.2% Fib and 100 SMA restest on the 4-hour time frame. Oh, and check out that bearish divergence on the chart! If you’re an aggressive bear, then you can short at current prices and place your stops somewhere near the Fib levels. But if you think that the pound can still hustle some muscle before going down, then you can also wait for a test of the 61.8% Fib that we spotted.
EUR/JPY: Daily Forex Chart
Here’s one for the trend warriors out there! EUR/JPY is forming what looks like a bearish wedge on the daily chart. Not only that, but it’s also testing the 100 SMA! As the School of Pipsology tells us, wedges like this can signal continuation for a trend. A short trade around the 115.00 psychological handle is a good idea if you’re one of them euro bears, but you can also wait for an actual break below the pattern if you’re not too sure about the yen gaining more pips on the euro just yet.