I spy with my two eyes, dojis on the hourly timeframe of USD/CHF. Hmmm, what could they mean? Well, if you’re feeling bullish for the pair, you might take them as a sign for a reversal especially since Stochastic also indicates that the pair is oversold. However, don’t get too excited buying the dollar. Using the Fibonacci retracement tool, we see that the pair could find resistance at the Fib levels. On the other hand, those who are feeling bearish for the pair may actually see the consolidation as a bearish flag and that the franc is only taking a quick break before continuing its rally all the way down to support around .9150.
Well, whaddaya know! Cyclopip was right on the money when he predicted EUR/GBP to get rejected from the top of the range on the 4-hour chart. Now it appears that the pair is finding support at the bottom of the consolidation, with a bullish marubozu forming just after an inverted hammer materialized. Take note also that Stochastic is indicating oversold conditions already. If there are enough bulls in the market, it may only be a matter of time until we see EUR/GBP trade back up to the top of the range. However, if there aren’t and the bears still have the upper hand, EUR/GBP could fall further down around .8220.
USD/CAD makes it to today’s roster once again! Connecting the pairs most recent lows, it looks like the pair is now trading just above the rising trend line. With Stochastic being in the oversold area, you may be tempted to go long on the dollar and hope to ride it all the way up to yesterday’s high at 1.0050. However, don’t get too giddy buying just yet. A close below yesterday’s low around .9950 could be a sign that the pair could fall to .9000.
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.