Higher price lows and lower stochastic lows… Why, that’s a bullish divergence right there! This could be the euro bulls’ cue to charge and push EUR/CHF up from the symmetrical triangle support around the 1.0400 major psychological level. A bounce could take the pair up to the triangle resistance near the 1.0500 major psychological mark and beyond, depending on how pumped up the buyers get. Take note, however, that the 100 SMA just crossed below the longer-term 200 SMA so there’s still a chance that sellers might put up a pretty good fight. If they’re strong enough, euro bears could even push for a downside break of support and a 250-pip forex selloff, which is roughly the same height as the triangle.
Here’s another consolidation play y’all might wanna look at. USD/CHF has been making a slow but steady climb since mid-June, creating a rising wedge pattern on its 4-hour forex time frame. Price is currently testing the wedge resistance around the .9550 minor psychological mark, which might keep further gains in check for now. After all, stochastic is already near the overbought zone and might be ready to turn lower. In that case, the pair could move back towards the wedge support around the .9450 minor psychological level and 100 SMA. If you’re bullish on this pair, the moving averages are in your favor, as the short-term SMA is above the 200 SMA, suggesting that further rallies are possible. If dollar bulls are too excited for those, an upside break of the wedge resistance might be seen.
Now this is the super-duper long-term forex setup I’m looking at! USD/CAD looks poised to test the neckline of the ginormous double bottom pattern on its weekly time frame and might be due for an upside break. The pair is just a few pips shy of the actual neckline resistance around 1.3000-1.3050 and stochastic is still moving up, indicating that there’s enough bullish momentum to trigger a breakout. The 100 SMA has also recently crossed above the longer-term 200 SMA, confirming that a reversal from the previous downtrend is bound to take place. Note that the chart pattern is around 6,000 pips in height so the resulting long-term uptrend could be of the same size. Keep your eyes peeled, swing traders!
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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.