Heads up! For the hardcore euro bears out there, you might want to think twice about shorting EUR/USD this time because a double bottom just formed on the pair’s 4-hour chart. According to my handy-dandy Chart Patterns Cheat Sheet, this chart formation signals that an uptrend could be in the cards. It seems that the pair already broke above the neckline of the formation around 1.2800 but stochastic is nearly in the overbought zone, which means that the bears could still have a fighting chance.
Will the former resistance act as support for USD/CHF? After bouncing the 61.8% Fib, the pair is currently stalling at the .9450 minor psychological level, which lines up with the 50% Fibonacci retracement level. To top it off, a bullish divergence formed just as stochastic started to cross up from the oversold area. Better find out if it meets the 9 Rules for Trading Divergences first before jumping in!
For those of you who love watching cable, here’s a chart that’s definitely a must-see. At the moment, GBP/USD is sitting right at a very strong support level at 1.5300. If you look back further, you’d notice that this level has been holding up really well for almost two years already! Stochastic hasn’t quite reached the oversold zone just yet, which means that pound bears have enough energy to take the pair lower. But if 1.5300 holds yet again, watch out for a potential bounce to the 1.5700 handle.
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.