If you’ve been keeping up with my chart arts, you’d know that the EURUSD has maintained a 160-pip range for a several days now. This might be pretty obvious on the hourly chart but looking at the longer time frame shows that something else is going on… It seems that the EURUSD is just about to break out of its bearish flag formation. If you’re bullish on the pair, the important resistance level to watch here is 1.4450. A convincing candle close above this resistance would confirm a topside breakout and could take the pair towards the next resistance region at 1.4600-1.4620. On the other hand, if you’re part of the bear camp, watch if December’s low (1.4218) breaks. If this happens, the next likely stop of the pair would be 1.4000.
Now, moving over to the USDCHF, we can see that the pair has been stuck in a descending channel. From the looks of it, the pair is about to climb higher now that it has reached the lower bound support. If this happens, the pair probably wouldn’t encounter any major resistance until it reaches the top of the channel (around the 1.0300-10320 regions). However, if sellers do manage to cause support at 1.0200 to break, the pair could fall towards the next support level at 1.0100, which is also a psychologically significant number.
Lastly, let’s end with a look at the GBPUSD. I pointed out last week that the pair had broken past a falling trend line and shot up before finding further resistance at the 1.6200 handle. At that point, sellers reentered the market, bring price back down. However, it appears that the former falling trend line served as a support line, as price could not make a clean break to the downside. With stochastics indicating that buying pressure may run out soon, we could see price fall once again to test support near 1.5925. On the other hand, price could rise to test resistance at 1.6200 once again.