Last Friday, the Aussie experienced a huge drop after it had traded above the 1.0400 major psychological level. Given how strong the move down was, it seemed as if the pair would continue selling-off. But with price testing the former broken resistance level at 1.0300, it looks like the bears will be hard-pressed to take the pair lower. Additionally, the pair is heading towards major Fibonacci retracement levels, which could mean that bullish traders could start jumping in again!
Speaking of retracements, almost the same setup could be seen on the 4-hour chart of GBP/USD. As you can see, Cable is currently testing the area between the 38.2% and 50.0% Fibonacci retracement levels. Moreover, there seems to be a huge bullish divergence going on as price has made a “higher high” while the Stochastic made a “lower low.” If you’re part of the bull camp, watch this pair carefully, as an opportunity to go long could present itself soon!
Happy Pip, are you reading this? Hah, I’m fairly certain Happy Pip has her eye on this failing channel on USD/CAD, especially since the pair just found support at the bottom of the channel! With the pair exhibiting a bullish divergence, it looks like it will continue on moving up. If you’re long on USD/CAD, the next major resistance you need to watch out for won’t be until 1.0200, which is the top of the channel.
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.