Bam! The EURUSD, in one unexpected move, managed to set a new yearly high yesterday just at the upper bound rising trend line. Where’s the pair headed now? Higher lows… Higher highs… Trend seems to indicate that the pair is poised for further gains. If the upper bound trend line breaks, the next major resistance won’t be until 1.4700, December 2008’s highest price level. Still, be careful as price is slowly consolidating at the tip of the bearish wedge. With stochastic indicating overbought conditions and price right smack at the trend line resistance, price could drop back down to support somewhere at the 1.4350-1.4400 area. If sellers really do bring on their A-game they could take the pair back to the lower bound rising trend line at 1.4200…
Look at that descending triangle on the USDCHF 4-hour chart! That triangle started to form mid-August as the pair made lower highs and hit support right around the 1.0550 area. Just yesterday, the pair broke below the support level and headed all the way down to a low of 1.0432. With the stochastic in oversold regions, the pair could be ready to climb back up. Previous support at 1.0550 could have switched gears and turned into a resistance level. The pair’s upward movement could also be cut short at the psychologically significant 1.0500 handle. If the pair goes all the way down, it might hit support at 1.0400, another psychological level.
After breaking free from the 0.6900 handle, the NZD/USD pair consolidated for awhile before moving higher again. It did so after it hit its uptrend line. Currently, the pair is trading above 0.6950. Both the uptrend line and the 0.6950 mark can act as supports for the pair. Since its ascent is still intact, the pair has an upside bias. Hence, we may see it move further up to 0.7000. On the other hand, it may just move sideways above0.6950 or even fall to 0.6900.