As discussed in the forex weekly outlook, both the AUDUSD and EURUSD have retraced back to the ATRs on the 60-minute charts. Currently, both the AUDUSD and EURUSD charts are indicating hidden divergence at an area that may support price and a continuation to the upside is probable as the price is retracing up to the ATR on the daily charts.
Both the 60 and 240-minute charts show that the AUDUSD has completed the retracement back to the ATR (plus sign below price). Additionally, as highlighted, with the yellow dotted lines, hidden divergence has formed on the stochastics because price made a higher low (.7860) when compared to the previous low (.7854) while the stochastics formed a lower low. This typically indicates a momentum move to the upside is probable in the very near future. However, you must also watch the 240-minute chart because there is overhead resistance at .7878 and price has not been able to close above this area yet. If the price does close above the .7878 area, then the next area of potential resistance is on the daily chart at .7959, which would also complete the retracement to the ATR on the daily chart, as well.
Although the 240-minute EURUSD is still overbought, the 60-minute chart is showing potential hidden divergence to the upside with a decrease in sellers as price approached the ATR. The hidden divergence is indicating that price has probably found an area that will likely support price moving up. If the price does begin to move up, the next likely area of resistance will be the ATR on the daily chart at 1.2470.
It is important to note that both of these uptrends have been created because of the daily charts being oversold on the stochastics. With the oversold conditions on the daily pushing price upwards to the ATR, it creates smaller intraday trends on the lower timeframes (ie 240-minute charts). Therefore, watching the daily charts for completion of the retracements is advisable.