Ain’t nothin’ like revisiting the past eh? After breaking through the neckline of a head and shoulders formation earlier this week, USD/CHF finally retraced a bit and retested the broken support level. It appears to have held well as resistance, as price bounced sharply off of it. With Stochastic about to crossover once again, we could see the bears come back to make their presence felt. I wouldn’t be surprised if this pair shoots off to make new lows below .8700 by the end of the week.
Next up, here’s a look at the Loonie. After bouncing off parity, USD/CAD zoomed all the way up to the 1.0200 handle. However, this playa has given back those gains and is now approaching the magical 1.0000 line once again. If you ask me, this pair seems to be forming a descending channel, so we may see USD/CAD fall a lil’ bit below parity before finding support. I’d wait for Stochastic to hit oversold territory and for some reversal candlesticks to form before putting up a long position.
Lastly, let’s hop on over to Lady Cable. Looks like Huck was right, as GBP/USD did form a wedge and break out to the downside. Now that Cable has recovered and retraced a bit, could this be a chance for the bears to get back in? The pair is currently finding resistance at the 61.8% Fibonacci level, and considering that it just broke out of a wedge, this might be a good time jump back in short if you’re bearish on the pair.
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.
Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.