EURUSD has been going everywhere! One day it’s on a free fall, the next day it’s zooming upwards… In any case, it seems that the pair finally broke out of its bullish flag last Friday as it rallied all the way back to previous support turned resistance at 1.4380 before giving up some of its gains. It’s hard to tell which way the pair would go next as it is right smack in the middle of its trading range. Taking a bullish perspective, potential resistance could be found at 1.4380 (last week’s high) and 1.4450 (this year’s high). On the other hand, if the pair drops, buying pressures could found at 1.4200 and 1.4100 respectively as both have served as significant support previously.
Check out the downtrend line on the USDCHF 1-hour chart. That’s looking pretty steep! The pair took a sharp dive in the middle of last week and has been tumbling down ever since. It had difficulty breaking above the downtrend line and it seems ready to retest it again. The stochastic is making its way out of the oversold territory, which means that the price could start to climb as well. It could drop down after hitting the downtrend line and fall all the way until the psychologically significant 1.0500 mark. But if the pair pierces through the downtrend line, it could encounter some resistance right around another psychologically significant level at 1.0600.
After breaking free from its short term down trend last Tuesday, the GBP/USD was pretty much in a consolidation mode for the rest of last week as it just moved within the 1.6600 and 1.6400 range. Currently, it is trading just above 1.6500. This level may act as a support. If this mark holds, the pair can rise back up again toward 1.6600. On the other hand, it can fall back down to 1.6400 if the support at 1.6500 breaks.