Anybody seeing that bearish flag chart formation on the 4-hour chart of the GBPUSD? It seems that the pair is consolidating around the 1.6200-1.6300 range after breaking out of a major support level. For now, the important price level to watch is 1.6168, last week’s low. If this level breaks, look for a move towards 1.6100 and 1.6000, respectively. More than being psychologically important, both price levels have served as resistance for the pair before (remember that resistance usually turn into support whenever it breaks). However, if 1.6168 holds strong and candles fail to close below it, the next probable move would be a retest of 1.6300.
And now, lets see what’s happening with the USDCAD! Is that a descending triangle I see on the daily chart? The pair has been bouncing between the falling trend line and support at around the 1.0425 price area. Right now, the pair is sitting just below the trend line. If resistance holds, price could dip to test support once again. On the other hand, if buyers decide to take over, a break in the formation could lead to price testing the previous high at 1.0750, or even the high at 1.0870.
Lastly, let’s end with a peek at the USDCHF. After being on a strong decline the past 6 months, the pair finally broke past its descending trend line last week! However, with stochastic showing overbought conditions, could we see a dip in price in the following days? If buying pressure is indeed exhausted, we could see sellers bring price back down to areas of interest around 1.02000, or possibly even near the parity line of 1.0000. On the other hand, if buyers remain in the market till the end of the year, this bullish run (or profit taking) could continue to push price back up a previous high at 1.0450 or support turned resistance at 1.0565.