After multiple attempts, USD/CAD finally smashed through support at the 1.3230 handle with sufficient and very convincing momentum until it found another support area at the 1.2950 minor psychological level. Price is already pulling back and while the 50% and 38.2% Fibonacci retracement levels look like good areas to watch, the more conservative pullback area is at the 61.8% retracement level since it lines up rather nicely with the former support area at the 1.3230 handle. In addition, the 100 SMA could also potentially act as dynamic resistance if or when price pulls back to the 61.8% retracement level.
EUR/USD broke past resistance at the 1.1200 major psychological level and then proceeded to climb higher until it encountered fresh sellers at the 1.1330 handle. If price continues to hesitate and a pullback occurs, the most conservative pullback area would be at the 50% Fibonacci retracement level since it sits right smack on resistance-turned-support area at 1.1200. And there’s a very good chance that price will begin pulling back soon since stochastic is already indicating overbought conditions. As usual, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, alright?
The recent forex price action on USD/JPY’s 1-hour chart is kinda similar to that of USD/CAD’s. Anyhow, price finally said goodbye to the support area at the 112.60 handle, but got violently rejected when it reached the 110.70 handle. Now, price is making its way higher to potentially meet up with the support-turned-resistance area at the 112.60 handle. Will they meet once more? Well, it’s possible since the price area at 112.60 is a price area with very significant market interest and it incidentally lines up with the 61.8% Fibonacci retracement level. Stochastic is also pointing up and has just recently began moving away from oversold territory, so forex traders who are bullish on the pair may be in control already.
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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.