First up is EUR/USD flirtin’ with the support-turned-resistance level at 1.2870. With Stochastic already indicating overbought conditions, do you think we’ll see the pair find resistance and plunge back down to 1.2650 once again? Maybe, but don’t get too excited just yet. It might be a better idea to wait for reversal candlesticks to materialize around the area before you pull the trigger.
Well, whaddaya know! Yesterday’s candle on GBP/JPY closed as a bullish marubozu! Zooming out to the daily timeframe , we see that the pair has formed a handful of dojis and this bullish candlestick around its previous low. On top of that, Stochastic is also in the oversold area. Some of you are probably tempted to join that bull camp now. However, just don’t go loco. Who knows, there may still be enough bears to push the pair back down to 117.00
Finally here’s EUR/GBP sportin’ what looks like a symmetrical triangle. The pair is currently testing resistance at the falling trend line. If you’re thinking of going short, it might also please you to know that there’s a bearish divergence with the pair making lower highs while Stochastic is making higher highs. But be careful, ayt? A strong break above last week’s high at .8380 could be an indication that the pair is headed back above .8400.
Before you get carried away with all these chart patterns, remember that technical analysis is only half the story.
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.