Is it just me or does the dollar’s rally against the pound has finally ended? From the 4-hour chart, we can see that price just bounced for the FIFTH time from the solid support line I drew. With stochastics coming out of oversold territory, would we see price beeline towards former highs? If buying momentum continues, look for potential resistance around 1.6700-1.6720, the previous week high. On the other hand, if support breaks, the pair’s next stop would probably be at 1.6130.
Now lets head on over to the EURUSD. Taking a look at the 4-hour chart, we can see that price action is now stalling around a previous support area around 1.4820. Support at the area has been tested many times, but none have been able to break through. Yesterday’s price action however, saw price dip to 1.4755. Will price action break through? Or is this merely a fake out? With stochastics indicating oversold conditions, we may see buyers reenter the market to make sure that support holds. If buyers do succeed, we could see price bounce all the way back up to test the 1.4900 handle, and quite possibly even the 1.5000 price level. If however, selling pressure remains strong, the pair could dip as low as 1.4630.
It looks like the USDCAD has been ranging the past couple of weeks, bouncing between highs just above 1.0700 and finding major support around the 1.0450 price area. As it is, price is heading south, with stochastic showing downward momentum. If price continues to drop, it could find some support at the recent uptrend line as well as former support at 1.0450. If support fails to hold, we could see the pair look test the 1.0300 and 1.0200 handles. On the other hand, if buyers manage to take over, we could see price test previous highs at the top of the range, just above 1.0700.