Don’t look now but USD/CHF just broke below the bottom of the descending triangle on its 4-hour forex chart! This could be a sign that the pair is in for more losses, as sellers have finally gained enough energy to push USD/CHF in their desired direction. If you missed the actual breakout move, don’t fret because the pair could still be in for a 600-pip drop, which is approximately the same height as the chart formation. If you’re a little more patient, you could wait for price to pull back to the broken support area to hop in at a better price. Stochastic is moving up anyway, hinting that a quick bounce might happen.
Think the trend is your friend? You might wanna take a look at this simple uptrend play on CAD/JPY’s 1-hour forex time frame. An ascending trend line can be drawn to connect the recent lows of price action, and it looks like another test of the rising support level is in order. Using the handy-dandy Fib tool on the latest swing low and swing high reveals that the 50% to 61.8% levels are closest to the trend line. In particular, the 50% Fib lines up with the 98.50 minor psychological level, which might hold as support. Make sure you set your stops below the trend line or the 98.00 handle if you’re planning on going long!
Last but definitely not least is this break-and-retest situation goin’ on in AUD/CAD’s 1-hour forex chart. The pair recently broke past resistance around the .9550 minor psychological level and zoomed up to the .9650 mark. Right now, it seems that Aussie bulls are taking a break and letting the pair make a retracement before heading much higher. The 50% Fibonacci retracement level is close to the broken resistance zone and may hold as support moving forward, but it looks like the 38.2% Fib is already keeping losses in check while stochastic is suggesting that buyers are feeling recharged.
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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.