Careful, euro bears! EUR/USD is currently sitting at the bottom of the ascending channel forming on its 1-hour time frame. At the same time, stochastic is signaling oversold conditions, which means that euro bulls might be ready to charge soon. A bounce could take the pair back to the top of the channel, which is right around the 1.3650 to 1.3700 psychological levels, while a breakdown could push EUR/USD back to 1.3400 support.
Unlike EUR/USD, this euro pair is stuck in a DESCENDING channel on its 1-hour time frame. EUR/GBP seems to have bounced off the bottom of the channel already and might be on its way to test the top, which is somewhere close to the .8350 minor psychological resistance. Stochastic is pointing down though, as though it’s hinting that euro bears can’t wait to pounce. Do you think they’ll push for a downside break of the channel support?
If you prefer longer-term time frames, then you might wanna look at this channel on EUR/CAD’s 4-hour chart. The pair just bounced off the bottom of the rising channel last week and is very close to testing the top of the channel once more. Stochastic is already on its way down, reflecting strong selling pressure. If you think the previous high around the 1.4400 is the line in the sand for this pair’s rallies, just be sure to set your stop above the channel resistance when shorting!
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.