Who’s looking to trade breakouts this week?
I’m keeping this USD/CHF triangle on my radar in case volatility picks up soon!
Before moving on, ICYMI, yesterday’s watchlist looked at GBP/USD’s downtrend setup when the U.K. declared an “Omicron emergency”. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Australian NAB business confidence index down from 20 to 12
Crude oil retreats on worries that Omicron could sap demandChinese internet firms’ crackdown weighs on tech shares
Japanese industrial production figure upgraded from 1.1% to 1.8%
BOJ offers huge cash injection to combat rising short-term rates
ADP trims Chinese 2021 GDP forecast from 8.1% to 8.0%
More than 20 companies shut down operations in Chinese province
U.K. average earnings index down from 5.9% to 4.9% vs. 4.6% forecast
U.K. claimant count down by 49.8K vs. projected 31.5K drop
U.K. unemployment rate down from 4.3% to 4.2% as expected
Eurozone industrial production rose by 1.1% vs. 1.2% consensus
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. headline and core PPI at 1:30 pm GMT
RBNZ Governor Orr’s speech at 7:00 pm GMT
If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.
What to Watch: USD/CHF
This pair formed lower highs and higher lows to trade inside a triangle pattern on its hourly time frame.
Price just bounced off support recently and might be aiming to test the resistance again. Will it break out this time?The 100 SMA is still above the 200 SMA for now, so the path of least resistance is to the upside. In other words, the top of the triangle is more likely to break than to hold.
If that happens, USD/CHF could climb by the same height as the chart formation, which spans roughly a hundred pips.
If sellers defend the triangle resistance, on the other hand, another move back to support around the .9200 handle might follow.
The release of Uncle Sam’s PPI report might be worth watching if you’re trading this one, as slightly slower producer price pressures are eyed. Weaker than expected results might mean spur a dollar selloff and a triangle breakdown.
Other than that, good ol’ market sentiment is also something you should keep tabs on, as risk-off flows tend to benefit the safe-haven dollar.