Whoa! The USDCHF just breached support at 1.0285 and fell to a low of 1.0187. With the stochastics currently climbing out of the oversold area, upward price action is probably up next. The pair could climb up to 1.0285, which by now could serve as resistance level. Coincidentally, this is nearly in line with the 50% Fibonacci retracement level. If the pair continues to tumble down, it could find support at the previous low of 1.0187 or right around the psychologically significant 1.0200 mark.
Now, lets move on to one of my favorite crosses, the EURJPY (ok fine, I don’t play favorites – I love them all!). The pair has been on an uptrend as of late, but its movement has been slowing down the past couple of days – probably because of the banking holidays in Japan. Could this mean we are in line for a breakout today? Right now, the pair is stuck right on the rising trendline. If the pair bounces from the trend line, we could see it go up and test the previous high at 135.50. If however, selling pressure causes support to break, we may see the pair shoot for lows at 134.00 and further down at 133.50.
So let’s take a look back at the cable. As we can see, the pair rallied all the way up to 1.6400. This level magically falls in line to its 61.8% Fibonacci retracement level (using the September 17 high as a swing high and the September 21 low as swing low). Will this resistance hold? If it does, the pair can make a U-turn and revisit 1.6300. However, 1.6500 is not too far ahead if the pair is able to blow past 1.6400.