The euro finally fought back yesterday after losing almost every single day this week. Now, a plethora of bullish signals have popped up on the daily! For one, stochastics indicate that the pair might be oversold. Secondly, a bullish divergence has formed – notice the lower lows in the stochastics and higher highs in the price! Lastly, there’s a bullish engulfing candle right smack at the resistance turned support trend line. Perhaps sellers are starting to jump back in? I don’t know for certain, but if this were the case, we might see the pair target this year’s high around the 1.4850 area. On the flip side, if price breaks support at 1.4500, I’m looking at the next rising trend line, somewhere around 1.4300 as next potential support.
The GBPUSD pair made quite a drive yesterday as it rallied back to the 1.6100 area after marking its 3-month low at 1.5771 last Monday. 1.6100 happens to be near the pair’s 50% Fibonacci retracement mark, using the high on September 24 as a swing high. The sellers, however, were keen to push the pair down to 1.6000. The cable might revisit 1.5900 if 1.6000 breaks. On the other hand, it may spring back to 1.6100 if buying interest spurs up again.
After breaching support at 90.40, the USDJPY tumbled down and dipped to a low of 88.24. The pair retraced back to the 61.8% Fibonacci level, which is nearly in line with support-turned-resistance at 90.40. The price seems to be heading upwards again, probably to retest the resistance level. The resistance at 90.40 could prove its strength yet again and push the USDJPY down. The pair could find psychological support at 89.00. But if the pair pierces through 90.40, it could encounter another barrier at the psychologically significant 91.00 mark.