Well, well, well, what do we have here? It looks like EUR/CAD is showing some signs of pulling back! After all, price is currently stalling and is starting to move lower. If this keeps up, we might see a test of the 61.8% Fibonacci retracement level, which coincides neatly with the broken falling trend line. The Stochastic is also going down and about to hit the oversold territory.
Almost the same setup could be found on EUR/JPY. Yesterday’s candle, as you can see, isn’t as convincingly bullish as the candles that came before it. With the Stochastic indicating that conditions are heavily overbought, we could see the pair exhibit a small retracement soon. If price does indeed fall, we could see the 38.2% Fib serve as the next support level.
What do you know? The descending channel I pointed out a few days ago held magnificently! Now, USD/CAD holding nicely at the bottom of the formation, and it looks like support will hold. The potential move up is also confirmed by the oversold Stochastic. If the pair rallies, it will likely go for another test of the top of the channel.
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.