First up is this simple trend line play on USD/CAD. Over the past four months, USD/CAD has dropped over 600 pips, as its decline down the charts has been as smooth as a baby’s bottom. Now that the pair is about to retest the falling trend line, the only question is whether the bears can remain in control. Take note that Stochastic may be on their side, as it’s entering overbought territory. I suggest waiting for some candlesticks to form at the trend line and for Stochastic to crossover before putting up a short position.
Next up, here’s an ascending channel on USD/CHF. Currently, the pair is trading near the middle of the channel at around the .9400 handle. If this holds, we may just see the pair make its way up to the .9450 or .9500 levels. If it doesn’t though, don’t be shocked if the bears push the pair down to test the bottom of the channel at around .9360.
Lastly, here’s one for my homegirl Huck! Yes, the euro’s been sinking over the past week, but could it be that the bulls are merely taking a break? Looking at the daily chart, it seems that EUR/USD has just formed a bullish flag, which means that the bulls could be gearing up for another solid rally. Watch out for a solid bullish marubozu that closes above this week’s highs. If that happens, you know what to do!
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.