Who loves double bottoms? Bulls love double bottoms! Is it true? Hmm.. hmm… They do, they do, they do-oh! It seems like the major resistance at 109.20 was too much for the bears yesterday and if what I’m seeing on EURJPY really is a double bottom, then the bulls are in for a treat! But I wouldn’t be too excited about it just yet. Stochastics tells me that the pair is already overbought and it still hasn’t traded past the neckline resistance at 110.82.
While price did go beyond the 61.8% Fibonacci retracement level on EURGBP, it looks like it has found some significant support at the .8200 handle. If you don’t believe me, just look at the lower shadows on those candles! The long shadows indicate that buyer interest is present around the.8200 psychological handle. Does this mean the pair will definietly swing higher? Of course not! Stochastics may be oversold, but it has yet to show upward momentum. If price manages to stay above .8250, then a retest of .8300 will be likely.
Uh oh, watch out USDCAD bulls! The pair seems to have found some major resistance on the falling trend line that I drew, which hints that the pair could possibly swing lower. If price manages to hold below the 1.0400 handle, expect a retest of former lows somewhere around the 1.0100 region. On the flip side, a daily candle close above 1.0500 will open July highs at 1.0700 for the bulls.