After more than a week of losses, it looks like the EURUSD is hoping to retrace some of its losses this week. Price is currently climbing higher and could go all the way to 1.4300 before finding resistance. Remember, whenever price manages to bust through an important support level, that price level becomes resistance. Moreover, 1.4300 lines up nicely with the 50.0% Fibonacci retracement level. With that said, if price does manage to touch 1.4300 and stochastics hit overbought territory, we could see a lot of sellers start jumping in and take the pair to last week’s low at 1.4030.
Another pair looking to bounce back is the AUDUSD. Price has been falling every since testing resistnace at 0.9320. Right now, it looks like the pair is due for a reversal, as it nears potential support at 0.8950, which happens to line up with the 0.618 Fibonacci retracement level. However, seeing as how an inverted hammer has formed and with stochastic nearing oversold conditions, we may just see the pair change course sooner rather than later. If price action reverses, we could see a test of the 0.9320 resistance once again.
Lastly, let’s end with the USDCHF. It looks like psychological resistance at 1.0500 is holding well! Last week, price action formed a shooting star, which was followed by a doji the next day. Could we be in line for a reversal? Stochastics indicate overbought conditions, so there may not be enough bulls in the market to test the 1.0500 price handle once again. If sellers come back in force, look for them to bring price back down to test the recent swing low at 1.0140.