Check out that perfectly-formed doji on the USDJPY’s daily chart! This candlestick formation occurred at the bottom of the latest drop, indicating that a reversal may be in the cards. Notice that a descending trend line can be drawn connecting the highs of the pair. If the pair indeed moves on an uptrend, then it could go all the way up to retest that trend line. But if the upward momentum is not that strong, the pair’s rally could be halted at the previous high of 92.55. On the other hand, if the doji proves to be a false signal, then the pair could find support at the nearby psychologically significant levels, such as 89.00 and 88.00.
Now, lets switch over to a daily chart on the EURJPY pair! The pair has been respecting a rising trend line since this past March. The pair did have some problems breaking past highs just above 138.50. Just yesterday, the pair touched the trend line and bounced from it! Currently, the pair is sitting near 131.50. With stochastics indicating that it may be entering oversold conditions, we may see the pair move back to the topside, where it could test previous high around 135.00 and 136.00. There are however, some bearish signals on the pair as well. For one, the pair seems to have formed a triple top. In addition, while the pair has been rising in a channel like motion, it seems that buyers are running out of strength, as the pair seems to have consolidated as the pair could not register a new high. If sellers continue to bring price back down to test the trend line and succeed, we could see some support at 130.00, near the previous low.
After a day’s off, I’m on to the cable again. So here we go… A daily chart of the GBPUSD pair is shown above. As you can see, the pair finally broke down yesterday from a head and shoulders formation. It sought ground at 1.5800 after breaking through the neckline and immediately sprung up towards 1.5900. Currently, it is trading just below 1.5900 and it may see this level as a minor resistance. Though, it may have enough push to move past the mentioned mark since the stochastics is indicating that conditions are already oversold. It could revisit 1.6000, which magically coincides with the formation’s neckline, if it does. On the other hand, it could fall at least down to 1.5800 again if 1.5900 holds.