Y’all better get battle-ready, bros, ’cause the neckline on GBP/USD’s double top formation is under attack! Yesterday, pound bears dealt their first blow to the neckline when price spiked lower. They may have failed to hold their ground below this level yesterday, but it looks as though they may be gearing up for a second attempt at breaking the neckline soon. Price is still hanging just above the neckline support level. Since the double top formation is bearish in nature, it might be best to wait for an opportunity to short the pair on the other side of the neckline. To play it safe, be sure to wait for a bearish candlestick to close below it!
If don’t believe that the trend is your friend and you’re a fan of catching bottoms, then USD/CHF may be the pair you want to trade today! As you can see, the pair found significant support at the .8900 psychological level and has even formed a gravestone doji. This means that a reversal could be in order, as Stochastic also shows that the pair is oversold. Look for the pair to show at least a retracement, possibly towards the .9050 level.
Lastly, let’s check out what’s poppin’ over on EUR/CHF. Since the beginning of 2011, the pair has consolidated into a 700 pip range. Currently, the pair is chillin’ right smack in the middle of the range. With the pair finding support at 1.2750 in the past and Stochastic showing oversold conditions, is it time to put a long position? Considering the sharp drop over the past few days, it might be best to sit out first and see if price can test the bottom of the range at 1.2450 before thinking about buying.