If you’re a Fib type of guy, you’re going to love how the 4-hour EURGBP is looking right now. As you can see, the pair just managed to regain some of its losses, but is finding some major resistance at the 38.2% Fibonacci retracement level. This caused one of the most recent candles to become an almost perfect gravestone doji. Also note that the 38.2% Fib also coincides nicely with the 0.8700 psychological barrier and a previously broken support level. The important thing to watch now is whether or not sellers will have enough juice to take the pair lower to last week’s low around the 0.8600 handle.
Next, lets skip on to the daily chart of the USDCHF! Over the past couple of months, the pair has been sticking within a range of about 400 pips, bouncing between highs near 1.0850 and the 200 SMA, which is acting as a dynamic support line. It appears that bearish divergence has formed recently, as price action has formed higher highs but stochastics show lower highs. With the recent shooting star candle, could we be in line for a reversal? Look for the pair to drop and head back down to test the 200 SMA at the 1.0500 handle. However, if buying pressure is strong, we could see the pair test former highs at 1.0890.
Lastly, lets end with the AUDUSD! The pair has been consolidating as of late, bouncing from support at the 0.9170 price area. Take note however, that it has been respecting a descending trendline and forming lower highs. If you ask me, it’s starting to look like a descending triangle is forming. With stochastcis still showing upward momentum, we could see price rise to test the falling trendline near the 0.9300 handle. If resistance fails to hold however, we could see the price spike up to test the yearly high just below 0.9400.