Divergence alert! EUR/GBP has been selling off but price has formed higher lows while stochastic made lower lows, creating a bullish divergence on its 4-hour time frame. At the same time, the pair is testing support at the 61.8% Fib and 200 SMA dynamic support level, which might be enough to keep further losses in check. If not, price could make its way down to the ascending channel support around the .8400 major psychological level before pausing from its slide.
Will the Kiwi make a break for it? NZD/USD is currently stuck in a rising wedge pattern on its 4-hour time frame, and the consolidation is getting tighter and tighter so a breakout could take place soon. The moving averages are suggesting that the path of least resistance is to the upside since the 100 SMA is above the longer-term 200 SMA. However, stochastic is pointing down so a move lower could also be possible. Either way, the resulting breakout could last by around 400 pips, which is the same height as the wedge formation.
Here’s one for the range traders out there! USD/CHF has been moving sideways on its 4-hour chart, bouncing off support at the .9535 and finding resistance near the .9900 major psychological level. The pair has just tested the range support and seems to have found bullish momentum, possibly setting its sights back on the range resistance. However, stochastic is already indicating overbought conditions while the 100 SMA is below the 200 SMA, signaling that sellers could still take control.
Forex Chart Settings:
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.