The dollar has been hustlin’ like Manny Pacquiao against the Swiss franc these past few trading days, huh? But ya know what, Friday’s candle closed as a hanging man which, according to the School of Pipsology, is usually taken as a sign of a reversal. On top of that, it closed around its previous high and Stochastic indicates overbought conditions! Does this mean we’ll soon see USD/CHF tumble down to .9000? Err, don’t be so sure about that yet. Who knows, there may still be enough dollar bulls in the market to push the pair back up to parity.
There’s also a similar setup on NZD/USD. Zooming out to the daily timeframe, we see that a hammer, a doji, and an inverted hammer formed at the .7500 major psychological handle (around its previous low!) and Stochastic is in the oversold area. I know that the setup might be too enticing for all you contrarian traders out there, but be extra careful ayt? A strong convincing close below last week’s low around .9460 could be a sign that NZD/USD would continue to drop to .7300.
Of course, I’ve also got a little somethin’ for those of y’all feelin’ bullish for the dollar. On the 1-hour timeframe we see that USD/CAD is testing support at the rising trend line. Will it hold? A bullish candlestick could mean that the pair will bounce back up to 1.0300. However, a break below the trendline, around Friday’s low at 1.0247, could hint that the pair would soon trade around 1.0150. So watch out!
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.