Is Cable ready to resume its drop? Price has pulled up for a quick retracement and appears to be finding resistance at the 38.2% Fib, which is right around the 1.6800 major psychological mark and the 100 SMA. A higher pullback could last until the 61.8% Fib or the 200 SMA, which lines up with a broken support area. Stochastic is already moving towards the oversold zone, with a bearish divergence already coming in play, indicating that price is ready to head south and test its recent lows near the 1.6750 minor psychological support.
If you’re gutsy enough to take a countertrend trade, then you should take a closer look at this rising channel setup on USD/CHF’s 4-hour forex chart. Price is stalling around the top of the channel near the .9100 major psychological resistance while stochastic is edging lower, indicating that the pair could sell off. This could lead to a drop until the mid-channel area of interest near the .9050 minor psychological level or until the bottom of the channel at .8950. Make sure you set your stop above the top of the channel if you’re thinking of shorting!
So this explains why EUR/USD’s dive has come to a halt recently! A quick look at the pair’s daily forex chart shows that price is stalling at a long-term area of interest around the 1.3350 level. Stochastic is climbing out of the oversold zone, which means that a bounce could be in the cards. Bear in mind that this resistance turned support area has held as a floor since November last year, which suggests that it could continue to hold for now. A bounce from the current levels could take EUR/USD back to the next area of interest at the 1.3500 handle.
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.