Trendlines, trendlines – they are your best friends, until they break and crush your trade in the process! It looks like the EURUSD could once again test the recent falling trendline that has been holding pretty nicely. The question is, will it continue to hold? If the trendline resistance fails to hold, we may just see price rise back up to former highs at 1.2640! Then again, with this being just the third retest, the trendline may actually hold. If it does, we may see price dip once again to support around the 1.2150 to 1.2200 area. And who knows what may happen if that support level fails?! Price may just fall to test the 1.2000 handle!
Well, it looks like the guppy made a break for it yesterday when it busted above the falling trend line on the 4-hour chart. Could this mean that the pair’s downtrend is over? With the stochastics giving the overbought signal, the pair might have to pull back a bit before heading higher. If it keeps climbing, it could encounter a roadblock at the support turned resistance around 134.50. On the other hand, if it falls back below the trend line, it could find support near the psychological 128.00 handle.
EURJPY : 4-hour
Lastly, let me end today’s chart art with a look at the EURJPY! After testing support around the 109.00 price area a couple of times this week, it looks like the EURJPY has finally broken out of its recent downtrend. With price now sitting above the 112.00 handle, could we see a test of former highs around 114.00? Or could this simply be a pause before sellers jump back in and make one more run for support at 109.00?