It looks like a lot of currency traders are watching that falling trend line resistance, as price dropped once again after touching it for the fourth time yesterday. Does this mean that the pair is trending downwards because it is making lower highs? Hard to tell, since there seems to be a lot of buying support right at the rising trend line, causing the pair to form sharp V-turns and higher lows. What is evident, though, is a potential breakout once price action reaches the tip of the quasi-symmetrical triangle. If the buyers end up victorious, the pair’s next stop would probably be the previous week’s high at 133.70. On the other hand, if sellers prevail, watch out for potential support around 134.00 (a psychologically significant price level) and this week’s open price (133.22); a recent low.
Now let’s head on over to the GBP/USD hourly chart, where a very simple setup has appeared. Look at how price bounced from both the .382 and .500 Fibonacci retracement levels, indicating that buyers are watching these levels closely. If you still haven’t noticed, we here at BabyPips.com love using Fibonacci retracement levels precisely for this reason. A lot of big institution traders watch these levels and they tend to be good spots to place buy/sell orders. With that said, if the pair heads lower, we could see heavy buying interest at the .618 Fib level as it is also located near the 1.6500. However, if the pair continues its upward move, it could revisit previous broken support at the .382 Fibonacci retracement level (around 1.6623).
Lastly, let’s take a look at the Kiwi! As you can see, there was an upward gap in price to start the week, which let the pair zoom higher. After that spike up, the pair has been consolidating the past couple of days, forming a symmetrical triangle formation. Could we be in line for a breakout? If buyers take control, we could see the pair shoot higher and test this week’s high at 0.7460 or possibly break for new highs near 0.7500. On the other hand, if sellers bring their A-game, watch for them to bring price down to previous lows around 0.7320.