Let me start the post with my favorite setup of the day: a Fibonacci play on EUR/USD. As you can see, price is currently retracing its gains after it hit a top at 1.4658 yesterday. Since the Stochastic just went out of overbought territory and is pointing downwards, it seems that we’ll see the pair post more losses and possibly drop to those oh-so-important Fibonacci retracement levels. If you’re bullish on the pair, watch the 1.4300 level carefully, as served as support in the past and it lines up with the 50% Fib nicely.
For chart pattern lovers, take a look at how GBP/USD is sporting a sexy descending triangle! A descending triangle is usually considered bearish, as it hints at a breakout to the downside. In this case, watch support at the 1.6300 major psychological level carefully! If the pair manages to close below it, we could see it fall further 200 pips more to 1.6100.
Finally, let’s move on to EUR/CHF. After staging a massive drop a week ago, it looks like EUR/CHF is beginning to recuperate its losses. Will we see more gains? Quite possibly as the pair is showing a bullish divergence and price has been making “higher lows.” For now, it is likely that we will see price edge higher and retest former highs at 1.2250.
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.