U.S. Dollar Index: 4-hour
Let’s kick off the day with a look at the U.S. dollar index. The dollar has been on a wild ride recently, falling from its high around the 85.00 handle to just a few points below significant support at 83.00. With the Stochastic heading out of oversold territory and price starting to climb higher, it seems that a retest of 84.00 is in the cards. After all, that level held as strong support before and it lines up nicely with the 50% Fibonacci retracement area. If price tests the level, the dollar bears could make a return and push the currency down again. Watch out!
With summer just around the corner, it looks like EUR/USD is beginning to range. As you can see, price is making its way higher, but it is about to encounter a key resistance at 1.3200. The 1.3200 major psychological level has served as a significant inflection point before, and with the Stochastic showing that the pair is overbought, we could see it hold again. If you’re part of the bear camp, the 1.3200 level could be a good level to consider jumping in short!
GBP/JPY’s price action on its hourly chart is looking pretty sexy as it seems to be bouncing around a tight descending channel. It’s presently stalling at the middle of the formation, but the recent price action suggests that it’s going to go higher. If you’re bullish on the pair, then you’ll be happy to know that the next resistance won’t be until the top of the channel, around the 154.50 psychological level.
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.