Oh my! Are my eyes deceiving me, or is that a bullish divergence on the 4-hour chart of EUR/USD? Price is making lower lows while Stochastic is making higher lows. If there are enough demand for the euro, we could see support at the 61.8% Fibonacci retracement level hold and the pair could hustle back up to 1.3400. But if we see a strong break of 1.3100, EUR/USD could drop to below 1.2900.
If you prefer trading crosses, I see a similar setup on another EUR pair. EUR/AUD is now currently testing its previous highs for support and the area coincides nicely with the 50% Fib level. Stochastic shows a bullish divergence too! Just be wary okay? A close below 1.4100 could indicate a rally up to 1.4400.
Bounce-bounce, bounce-bounce! It would seem that the top of the falling channel on GBP/JPY held and price bounced off resistance. If you’re planning on trading the pair, it might not yet be too late to jump in on a short and ride the drop all the way down to the bottom at around 149.50. Just be on your toes for reversal candles alright? Who knows, they could mean that we’ll soon see an upside break!
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.