Bounce or break? EUR/CHF has been consolidating inside a symmetrical triangle forex chart pattern on its 4-hour time frame and is currently testing the resistance area. The bearish divergence, with stochastic making lower highs and price drawing higher highs, is suggesting that a selloff could be in the cards. With that, EUR/CHF could drop to the bottom of the triangle around the 1.2200 major psychological handle or even make a downside break.
Here’s another forex chart pattern that you wouldn’t want to miss! GBP/AUD has formed a double bottom on its 4-hour time frame, indicating that the previous downtrend is about to reverse. However, price has yet to break past the neckline around the 1.8250 minor psychological resistance before making further rallies. If that happens, GBP/AUD could be in for a 400-pip climb, which is about the same height as the chart pattern.
The head and shoulders pattern on EUR/CAD has already played out but that doesn’t mean you can’t jump in to catch the drop! The pair is showing signs of pulling back to the neckline support-turned-resistance, which is in line with the 1.5000 major psychological level and the 38.2% Fib. To top it off, this is also close to the 100 and 200 SMAs! Stochastic is suggesting that there’s a bit of buying momentum left so it might be better to wait for the oscillator to indicate overbought conditions before shorting.
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.