USDJPY bears beware! The pair is about to run into a major support level at 88.13, which could halt the pair’s drop. Keep a close eye on price action, because the potential short-term bounce is highly likely given the deeply oversold stochastics and how this support level has been holding since December of 2009. Conversely, if we see a daily candle convincingly close below this level, it would open 85.00 for the bears.
It looks like a nice channel is starting to form on EURUSD. With price slowly climbing and stochastics pointing up, it seems that we would see the pair continue to retrace some of its losses and go for a retest of the falling trend line resistance at the 1.2300 handle. Now, if price were to fall instead, the next major support zone would be located between the previous day’s low at 1.2150 and the bottom of the channel at 1.2100.
Ooh, GBPUSD can’t seem to keep its head above the 1.5000 handle for long as yesterday’s sharp decline pushed the pair towards the 1.4950 region. However, sellers seem to be losing steam now that the stochastics are in the oversold area. The pair could pull up a bit, possibly until the former resistance at the psychological 1.5000 handle, which is nearly in line with the 50% retracement level. There’s also a broken support level which could act as resistance at 1.5025, which coincides with the 61.8% Fibonacci level.