Let’s fly, USD/JPY! Support at the 76.50 area has been holding like a boss lately as the pair tried several times to make a break for it but failed. A bullish divergence formed right at the minor psychological level, signaling that dollar bulls would soon take the upper hand. Now that stochastic crossed and moved out of the oversold area, the pair could be headed all the way to the top of the range, just below the 78.00 handle.
After making a strong upside breakout from its tight range, EUR/CHF seems to be finding the 1.2300 too tough to handle. A bearish divergence materialized, suggesting that the pair’s rally is about to lose steam. If that happens, euro bears could take the pair back to the 1.2000 support, where EUR/CHF previously consolidated. But if the SNB decides to shock the markets with an intervention again, we could see another strong break above 1.2300. Stay on your toes, fellas!
Anyone watching the guppy channel? The pair just found resistance at the top of the channel, around the 120.00 handle, and looks poised to head lower. However, the bottom of the channel seems to be holding as support, with a bullish divergence to boot! Once stochastic moves out of the oversold area, we might see this pair climb back up to the top of the channel. But if pound bulls don’t feel like jumping to action, watch out for a downside breakout.
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. Check him out, playas!