USD/CHF seems pretty exhausted from its recent dive and might be ready to pull up for some air, as the pair has formed a double bottom pattern on its 4-hour forex time frame. Price is currently testing the neckline around the .9500 major psychological level and might be due for an upside break, but stochastic is still making its way down while the short-term 100 SMA is moving below the longer-term 200 SMA. These could mean that sellers might stay in control for a while before buyers take over and push for a reversal. Note that the chart formation is approximately 400 pips tall, which means that the resulting rally could be of the same size.
Cable might also be in for a long-term reversal with this inverse head and shoulders chart pattern on its daily forex chart. The pair seems to have gotten rejected on its first attempt to break past the neckline around the 1.5900 major psychological resistance but could be gearing up for another one, as stochastic is nearing the oversold region. At the same time, the moving averages are edging closer together, hinting that an upward crossover might take place soon. If that happens, GBP/USD could gain more bullish momentum and start climbing. The chart pattern is around 1,300 pips in height so the potential uptrend could last by more than a thousand pips as well.
Euro bears, unite! If you’ve been waiting for a signal to short EUR/USD, this might be it. The pair is completing a double top formation on its 4-hour forex chart and looks ready to test the neckline around the 1.0900 major psychological level. A break below this support area could lead to a drop until the next support zone around the 1.0550 minor psychological level. However, the 100 SMA is still above the 200 SMA for now, which means that the path of least resistance is to the upside. Stochastic is on middle ground, barely offering any clues on where price could be headed next. If you’re bearish on this pair, keep your eyes peeled for a long red candle closing below the double top neckline!
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.