Confluence, baby! EUR/USD seems to be in the middle of a correction from its recent selloff, but the intersection of resistance levels around the 1.0950 minor psychological mark could keep further gains in check. This area lines up with a broken support level, the 38.2% Fib, and the 200 SMA so it would take a lot of buying momentum to power through that ceiling. At the same time, stochastic is indicating overbought conditions while the 100 SMA is treading below the 200 SMA, confirming that the downtrend is likely to carry on from here. In that case, EUR/USD could head back to the previous lows near the 1.0800 major psychological level or make new ones!
So much for aiming for the top of the channel! GBP/USD seems to have hit a major road bump at the middle of its rising channel on the 4-hour forex chart and may be due south again. This area of interest lines up with the moving averages, which have held as dynamic inflection points in the past, while stochastic is also reflecting that bearish momentum is in play. In addition, the 100 SMA just crossed below the 200 SMA, suggesting a potential selloff. With that, the pair could make another test of the channel support near the 1.5400 to 1.5450 psychological levels before making another go for the channel resistance around the 1.6000 area.
Higher price lows and lower stochastic lows… Why, that’s a bullish divergence right there! USD/CHF might bounce from the middle of the ascending channel on its 1-hour forex chart and head back to the top near the .9700 major psychological resistance if this divergence plays out. Price also seems to be drawing support from the 100 SMA, which is currently above the 200 SMA and indicating that the uptrend is likely to stay intact. If dollar bulls aren’t quite ready to charge yet, the pair could still retreat to the 200 SMA support or the bottom of the channel near the .9500 major psychological level before resuming its climb. If you’re really bullish on this one, you might wanna consider scaling in.
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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.