Remember the rectangular range on the EURUSD I pointed out two days ago? Well, yesterday, the pair rallied and broke through resistance! From the looks of it, the bulls are aiming for the next major resistance level at 1.3800. Still, I’d be careful on betting on an upward move as stochastics show that the pair is already overbought. In the event that the bears manage to keep the EURUSD’s head below 1.3700 today, we could see the pair drop for a fourth test of support at 1.3450.
After dropping like a brick last Monday, it looks like the GBPUSD is steadily making its way back to its week open price. Right now, the pair is sitting just below the 1.5100 handle. With stochastics indicating overbought conditions, could we be in line for a reversal soon? The pair could be find resistance at the weekly open price, which also coincides with the 50.0% Fibonacci retracement level. Now, if sellers jump back in soon, they may just bring price all the way down to this week’s lows at 1.4780.
Looks like the CAD has been on a mad run lately, as the USDCAD has dropped for 5 straight days now. When will the selling stop? My guess is that we could see the pair continue to fall until the support level at 1.0200. With the pair approaching oversold conditions, buyers may decide to come back to play. If they do, they may just push price all the way back to the top of the range to 1.0750. However, if selling pressure is strong, who knows… the USDCAD may end up at parity!