Here’s an update on the EURUSD 4-hour chart. After its sharp dive last week, the pair has just pulled back to the 50% Fibonacci retracement level, which lines up with a support-turned-resistance level. From there, the pair dropped back down and the stochastics suggest that this downward movement could continue. Perhaps the pair could slide down and retest its recent lows at the 1.3270 area. But if the buyers suddenly take control, they could carry the pair up to retest the double tops’ broken neckline near 1.3650.
Now let’s check out how the Aussie is doing on its daily chart. The pair is inching closer and closer to hitting the falling trend line connecting the highs of the pair since last year. If this trend line holds, it could send the pair tumbling until it finds support at the psychological 0.9000 handle. If the pair breaks below this level, it could even fall until it reaches another support level around the 0.8850 to 0.8875 area. On the other hand, if the pair breaks above the falling trend line, it could climb and retest its yearly high at 0.9407.
Next is the Cable (GBPUSD) on its 4-hour chart. As you can see, the pair has retraced all the way up to the 50% Fibonacci retracement level that I drew after touching a low of 1.4799 last week. With stochastics already in the overbought territory, the pair could turn south any time now. If it does, it could fall back down to revisit last week’s low. But if risk appetite persists, it could still move higher until it encounters some resistance at the 61.8% Fib or at the 1.5200 handle.