Trend traders, huddle up! EUR/GBP may be in for a strong bounce soon, as the pair is currently testing the rising trend line on its 1-hour forex chart. If this holds as support. price could head back to the previous highs near the .7400 major psychological resistance or perhaps make new ones. The bullish divergence, created by price forming higher lows and stochastic drawing lower lows, confirms that buyers are getting ready to push this pair higher. However, if sellers stay in control, EUR/GBP might break below the trend line and the .7300 handle. Better set those stops right if you’re trading this one!
Now here’s my favorite break-and-retest situation goin’ on in EUR/AUD’s 4-hour forex time frame! The pair just recently broke above a falling trend line resistance and zoomed past the 1.4000 major psychological level. From there, price pulled back to the broken trend line, which might hold as support from now on. Stochastic is moving down but is almost in the oversold area, hinting that euro bulls are about to charge soon. If that happens, EUR/AUD could carry on with its climb and possibly move beyond the 1.4000 handle. If euro bears stay strong, the pair could still fall back below the trend line.
Is another break-and-retest play in order for EUR/CAD? The pair has just broken below the rising trend line connecting its recent highs on the 1-hour forex chart, indicating that a reversal is starting to take place. Before price heads any lower though, it could make a pullback to the broken trend line, right around the Fibonacci levels. After all, stochastic is making its way out of the oversold area, which means that sellers are taking a break. The 61.8% Fibonacci retracement level lines up with the trend line and is close to the 1.3700 major psychological mark, which might keep any gains in check.
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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.