Bulls beware: the EURUSD has just broken a solid rising trend line support, indicating a possible trend change. The pair is currently consolidating above the 1.2300 handle, which could mean that the bears are simply revving up for a stronger move down. If you’re part of the bear camp, look for a break of the 1.2300 support for a possible move towards 1.2250 and 1.2170!
Do gaps always fill? Well, in the forex world, they normally do! After gapping up over the weekend to break out of the rising wedge, price is now retracing a bit. We may find support at the intersection of the former trend lines or at last week’s highs just above the .8700 handle. With stochastics indicating oversold conditions, we may just see buyers come back in and find this as a better opportunity to go long.
It looks as if the USDCAD has been stuck in a descending channel as of late. With price now retracing back to the 61.8% Fibonacci retracement level and stochastics showing overbought conditions, we may see sellers jump back soon and take the pair to the bottom of the channel. Still, if the 61.8% Fib fails to hold, we could also see further resistance at the top of the channel, around the 1.0280 price area. If resistance there fails to hold, we may just see the pair continue to rise and test former highs at 1.0350.