Let’s start off this wonderful week with a look at the favorite pair of the market: EUR/USD. As you can see, price has made is testing the 38.2% Fibonacci retracement level for the third time. Whether the level will hold or not is still up in the air, so be careful before choosing a direction. Watch price action carefully, because how price will close today will likely determine how the pair will move for the next couple of days.
Here’s something you don’t see every day: a broadening formation on the NZD/USD 4-hour chart. When found in an uptrend, which is the case now, the broadening formation is considered as a bearish pattern. It indicates that support may collapse soon, which would then lead to a near-term reversal of price action. Given this, it might be a good idea to consider selling at the top of the formation, especially since price has just formed a bearish divergence with the Stochastic.
Range, range, range! It appears that the bottom of the horizontal channel on the EUR/GBP 4-hour chart held again last Friday. And with the Stochastic slowly moving higher, we could see price continue to move up and test the major resistance level at .8400. If you’re bullish on the pair, then now is a good time to consider buying!
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.