Yesterday, I pointed out a very nice Fibonacci retracement setup on EUR/USD’s 4-hour chart. I mentioned that the area between the 38.2% and 50.0% Fibonacci retracement level could hold as resistance as the pair has been on a strong downtrend. The levels indeed held, and price appears to be moving lower again. If you’re part of the bear camp, you’re in luck because the pair still has room to move lower. With the Stochastic not yet in overbought territory, we could see the pair retest former lows just below the 1.39000 handle again.
While EUR/USD has been trending, it appears that GBP/USD has been moving moving sideways. As you can see in the chart I posted above, the pair has found major resistance once again at the 1.5770 level, forming a very clear range. Given how the pair formed a candle with a very long upper shadow yesterday and the Stochastic pointing down, it is likely that the pair would test the bottom of the range again.
If you’re not into downtrends or rangebound behavior, then perhaps uptrends are your cup of tea? Yesterday, NZD/USD fell to the 50.0% Fibonacci retracement level on the 4-hour chart and found support. Since the pair has been on an uptrend for quite some time now, this could be a chance for the bulls to buy at cheaper levels.
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.