Guess who’s back… Cable is! GBP/USD is now back down to its previous support area at 1.5670. Since Stochastic is already in the oversold territory, will GBP/USD find support once more? Only the market can decide. If you’re hoping to see a bounce, watch out for reversal candlesticks to materialize around the area. On the other hand, if you think the pound sell-off will continue, be on your toes for a close below 1.5650 as this could mean that GBP/USD is on its way to the 1.5500 psychological handle.
Look at USD/CHF just chillin’ like ice cream fillin’ at the .9200 psychological handle! Zooming in to the 1-hour chart, it seems like the pair is forming a bullish rectangle too. We’ve learned from the School of Pipsology that this is usually taken as a continuation pattern, but don’t get too excited buying USD/CHF just yet. Notice that Stochastic already indicates overbought conditions which could be a sign that the pair is on its way back down to .9080!
Lastly, here’s something for all you Fibonacci fans out there! The dollar’s rally against the yen seemed to have stalled at 82.50. But don’t fret! Using the Fibonacci retracement tool, we see that dollar bulls could resume control around 81.85 which is the 38.2% Fib level and a previous resistance area. If there are enough buyers around that level we could see USD/JPY bounce back up to 82.50. But if there are not, the pair could slip below 81.00 once again!
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.