Careful, euro bears! EUR/USD is approaching a long-term support area near the 1.2800 major psychological level. That’s around 150 pips from its current levels, which suggests that the pair might still have enough momentum to head lower. Stochastic is already indicating oversold conditions and is starting to move higher, which means that a bounce might take place sooner or later. In that case, EUR/USD might have a shot at recovering back to the 1.3000 major psychological level. Do watch out for a potential downside break though!
So this explains why Cable is stalling! GBP/USD is testing support near the 1.6200 major psychological handle, which happens to line up with the 38.2% Fibonacci retracement level on the daily forex chart. Stochastic is reflecting a pickup in buying momentum, as the oscillator is climbing out of the oversold zone. A bounce could take GBP/USD up to the next area of interest at the 1.6500 major psychological resistance or possibly until the 1.6700 mark. On the other hand, a continuation of the selloff could take the pair down to the 1.6000 major psychological handle.
Here’s another potential turnaround on a major forex pair! USD/CHF has been climbing steadily in the past few weeks, but it appears to be finding resistance at the .9350 minor psychological level. After all, this lines up with a falling trend line connecting the highs on its daily time frame and the 61.8% Fibonacci retracement level. At the same time, stochastic has reached the overbought zone, showing that dollar bulls are feeling exhausted. A drop from this area could push USD/CHF down to the nearby support zone at the .9100 levels while an upside break could be a sign that more gains are in the cards.
Slow Stochastic: 14,3,3 100 SMA: Blue line 200 SMA: Red line To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.