Are those double tops I spot on the USDCHF 4-hour chart? It looks like the pair already broke down below the neckline of the double tops, implying that the uptrend is over. Last week, the pair retraced up to the 61.8% Fibonacci level and retested the neckline. As it slid down, it found support at the previous low of 1.0285 and bounced up. Right now, the stochastics seem to indicate that the pair could climb once again. If it does, it could encounter resistance at the neckline again, around 1.0400 to 1.0420. But if the pair’s downward price action resumes, it could break below the support at 1.0285 this time.
Let’s take a look at the cable this time. On the 4-hour chart, there’s a nice descending trend line connecting the highs of the GBPUSD pair. However, it seems like the pair has already broken above the trend line after it surged higher during the last stretch of 2009. With the stochastics in overbought territory, the pair could take a pause from its upward action and pull back a bit. It could climb down and retest the trend line, right around the 50% Fibonacci retracement level, which happens to line up with the broken resistance at 1.0630. But if the downward momentum is strong enough to place the pair back below the trend line, the pair could fall all the way down to the previous week low of 1.5830.
Next is the AUDUSD on its 1-hour chart. As you can see, the pair closed out 2009 with a blast! It remains to be on a short term uptrend after breaking out from a cup and handle pattern. The pair can crawl all the way up 0.9100 if the uptrend line holds. But if the uptrend support gives way, it can find itself back down at 0.8900.