Spike alert! USD/CHF might have been going cray for the past couple of candles on the 1-hour chart, but that doesn’t stop the bears from defending the channel resistance. Heck, the pair can’t seem to get past the .9650 minor psychological level near the 200 SMA and the top of the descending channel! What’s more, stochastic is also about to hit the overbought area. A short trade at current levels could make for a good trade idea if you think that the Greenback would go back to its previous lows against the franc. Just make sure you keep close tabs on your positions up until you close ’em!
If countertrend trading is more your thing, then this setup is for you! AUD/USD just got rejected at the .7600 handle, which is right smack at a rising channel resistance on the 4-hour chart. What makes this setup interesting though, is that there’s also a slight bearish divergence on the chart. The Aussie bears could short this pair all the way to the .7500 mid-channel support or the bottom of the channel at .7400. Of course, you could also wait at these levels and execute long trades if you’re one of them Aussie bulls.
I spy with my blue, bedroom eyes a resistance-turned-support action! EUR/GBP is finding support at the .7650 levels, which lines up nicely with a broken channel resistance on the 4-hour time frame. Not only that, but stochastic has also just left the oversold levels. Are we seeing the start of a bounce for the euro? A long trade at current levels could get you decent pips if you believe that the euro is headed for its highs near the .8000 handle. Of course, you could also wait for a break below the broken channel resistance if you believe that the pound will soon sneak up on the common currency.
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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.