My, my, those lovely Fibonacci levels! Once again, the mighty 61.8% Fibonacci retracement held on the EURUSD! In case you haven’t noticed, those Fib levels have been holding pretty nicely on the EURUSD. Not to mention, the weekend gap has been filled. With stochastics showing downward momentum, we could see sellers continue to drive price back down, with their targets probably set on the yearly low at 1.2525!
Remember that NZDUSD rising channel I showed you a few days ago? Let’s zoom in to the 4-hour chart! The rising channel seems to be holding up really well since the pair has been moving inside it for these first few months of 2010. I thought the pair’s recent uptrend would take the price all the way up to the top of the channel yesterday but it only topped out a few pips shy of 0.7300. With the pair waiting at the middle of the channel, would it continue moving towards the bottom? Or would it climb up to retest the previous day high near the 0.7300 handle? The stochastics seem to be crawling down from the overbought area, suggesting that the downward price movement could carry on.
After last week’s technical glitch helped the pair break through a wedge formation, we saw the USDJPY test the yearly low at 88.15 before bouncing right back up. Buyers have come back with force, but it seems that the former rising trendline has held as a resistance. Notice the two dojis that formed as price neared the trendline? Stochastics are now indicating overbought conditions, so we could see sellers jump back in to bring price back down. Look out for the 91.75 price area, which was a former low. If that fails to hold as support, we could see price drop all the way back down to the 2010 low!