You know what’s better than breakouts? Retests, homies! See if you can take advantage of possible trend changes on USD/CHF and EUR/AUD’s broken patterns.
After breaking below a rising channel and testing .9715 earlier this week, USD/CHF is back above the .9750 where it’s struggling to extend its bullish momentum.
And why not? The .9750 area lines up with a broken channel support, which is also near the 100 SMA that looks ready to cross below the 200 SMA on the 1-hour chart. Stochastic has also just left overbought territory, which could get more dollar bears to pay attention.
Shorting at current levels and placing your stops just above the broken channel support is a good idea if you think Swissy will make new weekly lows.
If you think we’re lookin’ at a fakeout and that the pair will pop back up, though, then you might want to wait until the pair is actually back at the channel before you place any long orders.
After failing to break above 1.5250, EUR/AUD looks set to revisit the 1.5050 psychological area. And as you can see, the level is right smack at a broken triangle resistance, which also happens to line up with a 38.2% Fib on the daily time frame.
Think euro bulls will step in at the level? Stochastic is still chillin’ in the overbought region and we have yet to see the strength of the retracement, so there’s still a possibility that the pair could drop down to as low as the rising trend line support near 1.4900.
In any case, it looks like y’all still have time to whip up tight trading plans before we see just how deep this retracement is gonna go. Don’t forget to keep your stops wide, aight? Currency crosses like these can see volatility like nobody’s business!