Chart pattern time! I’m serving up a potential head-and-shoulders pattern on CAD/CHF and a triangle on NZD/CHF in today’s intraday charts update. Check ’em!
Looks like a head-and-shoulders pattern is beginning to form on CAD/CHF’s 1-hour chart.
The pair needs to clear the neckline at 0.7530 in order for the pattern to be validated, though. And if the pattern does get validated, then the pair will likely have enough steam for a 250-pip move to the downside.
But as y’all can see the pair has also formed a rising wedge, which is a bearish forex chart pattern. Not only that, the rising wedge was already broken. So if you’re bearish on the pair and you also expect the head-and-shoulders pattern to be validated, then you can jump in early with a short, if that’s your thing.
Just note that the pair needs to clear the 0.7600 major psychological level on strong momentum in order for the downside break from the rising wedge pattern to be confirmed. Otherwise, the probability of the breakout ending up as a fakeout remains high.
All bearish bets are off if the pair moves higher and clears 0.7680 on strong bullish momentum, though, since that’s a signal that them bulls are in control.
NZD/CHF has recently been trading sideways while tapering into a point. And in the process, a symmetrical triangle pattern has emerged for us to play with.
A symmetrical triangle may break either to the upside or the downside, so we don’t really have a strong directional bias on the pair. As such, prudent forex traders may wanna prepare for both scenarios.
In any case, just make sure to practice proper risk management, a’ight?
Also, keep in mind that an upside breakout needs to clear 0.7090 before you can chillax. A downside breakout, meanwhile, needs to smash past both 0.7030 and 0.7010.