Give and take a few fakeouts, it looks like the EURUSD’s trading range,
which I pointed out two days ago, has managed to remain intact. The pair is currently making its way up to the top of the range (1.4450) where it would probably encounter some major resistance again. If resistance holds, the pair’s next likely move would be a retest of support at the bottom of the range, somewhere around the 1.4250-1.4280 price region. Now, on the other hand, if resistance breaks and candles start closing above it, the pair could soar all the way to 1.4600.
Let’s move on over to the 4-hour chart of the USDCHF. As you can see, the falling trend line that extends all the way from December 22 remained strong yesterday, as the USDCHF bears sold the pair right after hitting it. From the looks of it, however, their run is going to encounter heavy support as price is now approaching a significant area of interest. If the bears are strong enough to bust through support, the pair could drop as low as 1.0050. On the other hand, if candles fail to close below 1.0250, look for a retest of the falling trend line.
Finally, let’s end our tour of the European pairs with a look at the GBPUSD. The pair had been on a downtrend, as can be seen by the falling trendline. Recently, the trendline was broken and price action shot off before encountering a support turned resistance level near the 1.6200 handle. Since then, the pair has retraced and is now testing the former trend line, which is providing some support. Interestingly, it seems to me that some bullish divergence is forming on the pair, as price action has registered higher lows, while stochastics is showing lower lows. Could we be in line for another upswing? If buyers come back to play, it could test the 1.6200 resistance once again. If sellers dominate however, we could see price action fall to the recent swing low at 1.5832.