Let’s start with my take on EURCHF. After three straight days of gaining, it looks like the bulls will have a difficult time taking price higher. For one, a hidden bearish divergence has formed on the daily as price is making “lower highs” while stochastics is making “higher highs”. And two, price found some major resistance on the 61.8% Fib, a level that a lot of traders watch.
Ah, the trusty old Fibonacci retracement levels! Let’s use them again, shall we? This time, take a look at EURGBP. Looks like the 61.8% Fib level has been holding pretty nicely this past week. Notice the wicks of those two candles. With stochastics indicating overbought conditions, is it time for the pair to head on lower? If we see another bearish candle today, it could be a sign that the pair is headed for former support levels at .8230. On the other hand, if we see a candle close above the 61.8% Fib, it might be a sign of more bullish moves to come.
To end our EUR special, let’s hop on over to EURCAD. After rising strongly to hit a high at 1.3690, the pair has retraced and is now trading at around 1.3450. I have a feeling that we may see support at the 1.3400 handle. This level doesn’t just line up with the 38.2% Fib level, but also served as resistance in the past. Could it now serve as a support level? Stochastics just entered oversold conditions, so we may see buyers jump back in once price hits the psychologically significant level.