Let’s kick off the day by checking out USD/CAD on the hourly timeframe. It looks to me that the pair found support at the 61.8% Fibonacci retracement level. And what’s this?? Stochastic is showing a bullish divergence, making lower lows while price is making higher highs! I know some of you are probably thinking of going long on the pair now. If you are, just be on your toes for candlestick patterns as they could signal that there are still enough bears in the market to send USD/CAD back down to 1.0450.
Now let’s head on over to EUR/USD, lookin’ so sexy with those Fib lines! It looks like euro bulls woke up from their slumber yesterday and pushed the pair back up to the 38.2% Fib level. However, with Stochastic already indicating overbought conditions and showing a bearish divergence, it looks like the pair could slip below 1.3200 soon. But that’s just me. Who knows, we may just see EUR/USD rally all the way up to 1.3500!
We also see a similar setup on the 1-hour chart of AUD/JPY. After the pullback to the 50% Fib level, will the pair continue its downtrend? After all, Stochastic is already in the overbought territory. Maybe. But again, just be wary of reversal patterns as they could signal that the pair would hustle some muscle back up to 75.00.
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. Check him out, playas!