Forex Watchlist: EUR/USD’s Trend and USD/CHF’s Resistance Level

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!

Short EUR/USD

EUR/USD: 1-hour Forex Chart

EUR/USD: 1-hour Forex Chart

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?

Short USD/CHF

USD/CHF: Daily Forex Chart

USD/CHF: Daily Forex Chart

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!

XOXO,

Huck

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  • Cosmin

    Hey!

    Nice trade. I like EUR USD setup.
    But today is Friday and is unlikely that the price will hit TP point. Will you hold your trade over the weekend?

    Now is 11:20 CET and I have jumped into that trade after a second Sell signal(first was a strong sell bar, yesterday at 15.00 CET), but I will exit this evening no matter what.

    • Hi Cosmin! How did your EUR/USD trade turn out? 🙂

      • Cosmin

        Hey Huck!
        As it was Friday I only took a smaller risk so I have made a profit of 0.7%.
        Got in at 1.11666 and out at 11.11361 with 30 pips profit and a possible SL at 1.12028

        Did you took it?

        • Congrats! No, I didn’t take it. I did buy a couple of days later though, and managed to lock in 65 pips from a long trade. 🙂