Remember that bullish flag that we were looking at yesterday? Well, it looks like it didn’t break up after all. All hope is not lost for the bulls though, as USD/CHF is still sitting at a sweet buy spot. For starters, it’s currently at the 1.0275 area, a level that lines up nicely with a previous rising channel resistance. It also doesn’t hurt that it’s heading right towards the SMA support lines as well as possible Fib retracement levels. Last but not the least is Stochastic hanging around the oversold territory. Not bad, eh?
After breaking below the 1.5050 area last week, the bulls are back in the game and have pushed Cable back to its previous support area. Will we see a support-turned-resistance scenario in this case? Stochastic is currently on the bulls’ side with its nearly overbought conditions and the long wicks above the resistance area are also helping the bulls’ cause. A stop just above the level could get you some pips if you think that the pair is headed for new lows. On the other hand, you could also buy the pair and place your stops just below last week’s lows if you think that we are looking at a fakeout in the making.
Last one up for today is a classic break-and-retest chart on EUR/CAD’s 4-hour time frame. The 1.4175 handle has served as a solid support that wasn’t broken until last week. Unfortunately for the bulls, a retest proved to be unsuccessful in producing a fakeout. Does this mean that the euro is headed for new lows against the Canadian dollar? The pair has just made new lows, which is a boon for the bears. A stop just above the previous support area could get us a good trade especially if you put them above the 100 SMA. Just make sure you allow some breathing room for trading currency crosses when you make your trading plans!
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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.