European forex blog

EUR/USD managed to sell off slightly below the sideways consolidation channel that had contained price since last Thursday.  Price is now testing this previous previous support as resistance as price bounced from the bottom of the lower quartile of the channel.  This may indicate that price is ready to sell off tomorrow or at least have a short bias especially if price can break down below the monthly pivot.  Watch for possible resistance at the weekly high of 1.3738, BUT IF this level is broken, watch for an opportunity for long entries, such as a breakout and sell back to this level to test for support! If price does sell off as expected, 1.3340 is a fib retracement and 50% fib level , then 1.3242 is the next major fib level which may both offer support!

GBP/USD rallied up through resistance and made new 10 day highs and has come back down to the previous resistance and has tested for support several times and held each time so far.  IF this level holds and price rallies, 1.4846-1.4886 is a resistance cluster and 1.4984 is last months high for the next higher potential resistance levels.  IF price sells back off below 1.4648 then the next possible support is 1.4535 for light support (62% retracement) and 1.4450-1.4418 as strong possible support.

USD/JPY rallied up to the 20 day MA and sold off towards late Tuesday night as price also hit the top of a long term trend line which may reverse price to the short side on Wednesday.  If price does sell off 97.00 and 96.64* are fib retracement levels with 96.64 being a fib retracement cluster which could be strong support the 1st time tested as long as the FX multimaps and FX power index are not at their extremes. IF price rallies, 98.71 is the beginning of the next resistance cluster and trade zone for strong potential resistance as price has failed near this level multiple times already.

USD/CAD sold off to double bottom at last week’s lows then rallied for the remainder of the day indicating that price may be ready to rally on Wednesday or for the remainder of the week.  IF price rallies, the next possible resistance is 1.2406 and 1.2465 (38% fib retracement, weekly pivot/50% retracement.)  IF price sells off, watch for the currently week low to again offer support as price has bounced from this level heavily before BUT IF price drops through this level, be prepared to short the break down as this may trend down extremely heavily as many stops are likely to triggered!!

USD/CHF for the 4th day in a row tested and failed at the 200 day MA as price is now in a sideways consolidating channel after the massive sell off from mid last week.  There is a slight long bias so be prepared for price to potentially breakout of the consolidating channel and correct itself after the huge sell off previously mentioned.  IF price rallies over 1.1340, this may be a great chance for a long entry by buying the breakout, but be cautious for false breakouts!  The next possible resistance is 1.1140-1.1467 and 1.1561*  (fib retracement levels and combinations of monthly and weekly pivots.)