Looking for more forex setups on the majors? I spotted a neat trend play on EUR/USD and a possible reversal on USD/CHF. Check it!
Here’s one for the dollar bulls! EUR/USD is trading just below the 1.1200 major psychological level, which is also near where the 100 SMA and falling channel resistance are on the 1-hour chart.
Fundamentally it makes sense to short the pair. PMIs and sentiment reports from the euro zone have printed mixed results at best this week while most traders are rooting for a hawkish speech from Yellen to signal a rate hike in June. The U.S. GDP will also be printed in a few hours and it’s widely expected that it will come in at 0.8% vs. its 0.5% growth in Q4 2015.
Do you think this setup is worth a shot? Price has just broken above the falling channel, but not far enough to still consider a fakeout. How about a stop just above the 200 SMA while aiming for the previous lows?
This one is for the dollar bears out there! USD/CHF is consolidating at the .9900 mark which nicely lines up with a falling channel resistance as well as the SMAs on the daily time frame. Not only that, but stochastic is also hanging out in the overbought territory.
I’m having second thoughts about this one though, mostly because most traders are currently bullish on the dollar. And why not? Fed members have been giving hawkish speeches left and right with Yellen also expected to follow suit today.
Overall this looks like a pretty good technical setup though it’s not something I’m comfortable in taking until I see a catalyst against the dollar. Maybe a weaker-than-expected GDP report or a surprisingly dovish speech by Yellen?
What do you think? Your two cents are most welcome!