Beware EUR/USD bears! The bulls seem to be regaining control again! As you can see, there are signals that suggest that EUR/USD could start rallying. For one, the Stochastic shows that conditions are oversold. Two, price bounced off from 1.2650, which was a level that served as major support in the past. And lastly, a bullish engulfing candle formed after a doji. If price continues to move up, the 1.3000 level may be the next major inflection point.
Did anyone get a chance to catch this Aussie downtrend? Well, it’s not too late, folks! AUD/USD’s falling trend line on the 1-hour chart is still very much intact, and the pair seems ready for a quick retest. Take note that the broken support at the .9900 major psychological handle is right in line with the 61.8% Fibonacci retracement level, which means that it could act as resistance later on. Make sure you wait for Stochastic to turn if you decide to jump in!
It seems that the old market cliche “All gaps get filled” is true. Just look at EUR/GBP! The pair’s recent rally has allowed it to ALMOST fill the weekend gap from a couple of weeks ago. It’s also very interesting to note that the area coincides nicely with the 61.8% Fibonacci retracement level. Does this mean the pair find resistance at the level? After all, Stochastic already indicates overbought conditions. But as I always say, it’s better to wait for confirmation signals in the form of candlesticks. Who knows, there might still be enough euro bulls to push EUR/GBP all the way up to around .8250.
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.