Yesterday, I had a chart that showed that the USDCHF pair was ranging last week. Well, guess what – it broke out yesterday! The pair busted through support near 1.0230 before consolidating late in the day. If selling power continues, price action could shoot for parity at 1.000. On the other hand, with stochastic showing upward momentum, we could see price action bounce back up and possibly test the former support at 1.0230. It could become an area of resistance now, as it also lines up with the .500 Fibonacci retracement level.
Looks like we’ve got some mixed signals on the 4-hour USDCAD. On the bearish side, the pair has already broken past through the rising trend line by connecting October lows. In addition, the pair just made lower high, indicating that the trend has now possibly reversed. On the bullish side, price action seems to have been stalling on the Fibonacci retracement levels. Just last week, the .382 Fibonacci level, which coincides with the psychologically significant 1.0600 price level, held up nicely as buyer push the pair around 200 pips before topping out. The pair is currently sitting on the 0.500 Fib level and it looks like some buyer interests are present. Since stochastics is in oversold territory, watch out for a retest of broken support at 1.0600.
Lastly, let’s take a look at the EURJPY! The pair is forming an ascending triangle on the 1-hour chart, with resistance at 135.00. Take note that an ascending triangle is a bullish chart formation, so we could be in line for a breakout to the topside. If resistance doesn’t hold at 135.00, we could see price test former highs at 136.00. However, if sellers decide to come out and play, we could see price fall test the rising trend line or at former lows at 133.50.