After touching a falling trendline last week, the USDJPY has bounced back lower, registering a bearish red candle yesterday. With the recent doji and spinning top, could we be in line for a down move? Stochastics are almost in overbought territory, so buyers may be running out of steam to push price higher. If sellers jump back in and take over, they could take price back down to former lows around the 89.00 handle. However, if we see a daily candle close above the trend line, it may signal a strong move to test former highs just above the 92.00 price area.
Next, let’s take look at the AUDUSD. The pair has been on an impressive run the past few weeks. After trading as low as 0.8578, the pair has retraced back to as high as 0.9195 – rise of 600 pips! The pair is now trading near the top of its range. With stochastics showing severely overbought conditions and a shooting star and doji forming on the daily chart, could we be in line for a reversal soon? If price can close below yesterdays low, it may indicate that Aussie bears are gonna come roaring back. They could claw price back down to around the 0.8880 price area. On the other hand, Aussie bulls aren’t done yet, they could push price back all the way up to last year’s highs at 0.9400!
It looks like the EURUSD found some mad sellers in yesterday’s trading session. Just like I pointed in my update yesterday, the EURUSD was able to find some significant support and bounce right at the intersection of the broken falling trend line and the 61.8% Fibonacci retracement level. With stochastics trending higher, could price continue to head up? If you’re a EURUSD bear, the important level to watch now is the previous day’s low. A break in that level could push the pair back down to major last week’s lows at 1.3550.