To hold or not to hold: that is the question! Notice how resistance at the 50% Fibonacci retracement level was able to hold steady yesterday despite numerous tests. Could it be that the EURUSD is just having difficulty finding buyers? I don’t know for certain so keep a close eye on this level. If this level holds, we could see the EURUSD fall back to this week’s low, somewhere around the 1.3120 region. On the other hand, if we see this level break, the move upward would probably be limited by the 61.8% Fibonacci retracement level.
After forming lower highs and respecting a falling trend line, the Aussie bulls have now pushed the AUDUSD higher, threatening to break through resistance. Price action has yet to break through last week’s high and with stochastics indicating overbought condition, do the bulls have enough juice to keep pushing higher? Watch out for a candle stick close above resistance at 0.9315 needed to confirm that this is indeed a breakout and not a fake out.
Lastly, let’s take another look at the AUDJPY and zoom in a little bit. As I’ve pointed out before, the pair has been ranging between support and resistance lines of a broadening formation. Currently, price is chillin’ like its summer time just below the resistance. Notice the doji and spinning top that has just formed recently – could we be in line for another U-turn? Look for the pair to drop to minor support at 85.75. Just keep in mind that the more times a support or resistance point is tested, the more likely it will break in the near future.