Intraday Forex Charts Update – July 5, 2016

AUD/USD: 1-Hour

AUD/USD: 1-Hour Forex Chart

AUD/USD: 1-Hour Forex Chart

AUD/USD has been steadily moving higher inside an ascending channel, and is currently testing the channel’s support area. Normally, I’d just say that it’s time to start looking for opportunities to go long, but in this case, it’s a bit more complicated since we’ve also got a bounce-or-break situation, given that the channel’s support area lines up with 0.7470 (dashed horizontal line), which is a price area with very significant market interest. If support holds, then all is right in the world and the pair would likely climb higher. But if it breaks, then bears may end up gunning for 0.7340. And if they go lower, then a head-and-shoulders pattern may even emerge, which could attract more sellers.

EUR/USD: 1-Hour

EUR/USD: 1-Hour Forex Chart

EUR/USD: 1-Hour Forex Chart

An ascending triangle is usually considered a bullish chart pattern, but in this case, it’s probably prudent not to have a directional bias, given the large drop before the triangle formed. Anyhow, the triangle is roughly 200-pips tall, so a breakout could potentially last for the same amount. Looking at our technical indicators, the 100 SMA seems to be acting as dynamic support and the two moving averages even look like they’re about to cross-over into uptrend mode. Stochastic, meanwhile, is pointing up and leaving oversold territory, so an upside breakout is the more likely scenario at this point. The minor psychological level at 1.1150 seems very well-defended, though, as I highlighted above.

USD/CHF: 1-Hour

USD/CHF: 1-Hour Forex Chart

USD/CHF: 1-Hour Forex Chart

USD/CHF surged higher past resistance at 0.9690, but encountered a lot of sellers and was eventually pushed back down to 0.9690, giving us a textbook break-and-retest setup in the process. And if we apply our Fibonacci tool, we can also see that the 0.9690 handle is just above the 50% Fibonacci retracement, which gives us a confidence boost that support will hold and price will likely go back up again. The only thing to worry about is that stochastic is currently signalling overbought conditions, so make sure to proper risk management.

Forex Chart Settings:

Slow Stochastic: 14, 3, 3
100 SMA: Blue line
200 SMA: Red line

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.