Bounce, bounce, bounce, bounce… EUR/CHF has been moving back and forth between support at the 1.0780 level and resistance at the 1.0900 major psychological mark. Price just turned upon hitting the top of the range but stopped midway towards testing the bottom. It looks like the pair is gearing up for another test of the resistance, which might continue to keep gains in check. Stochastic is already moving down from the overbought zone, indicating that euro sellers are taking control of price action. In addition, the 100 SMA seems ready to make a downward crossover to show that a selloff is in the cards. If you’re looking to short this one, don’t forget to set your stop past the range resistance!
Here’s another range setup you might be interested in! NZD/JPY just hit the ceiling at the 80.90 area and looks poised for a move south, possibly until the bottom of the range at the 80.00 major psychological mark. The moving averages are criss-crossing, which suggests that the ranging market environment could carry on and that the range support might hold as a floor again. Stochastic is on the move down, indicating that Kiwi bears are on top of their game, but the oscillator is almost in the oversold zone. If buyers take over, another test of the range resistance could be possible or perhaps even an upside breakout. Better wait for a break below the short-term consolidation around the current levels if you’re hoping to catch some downside momentum.
If you think the trend is your friend, then you definitely gotta see this descending channel setup on EUR/AUD’s 1-hour forex time frame. Price is already testing the channel resistance near the 100 SMA, which has held as a dynamic inflection point in the past. In addition, the short-term moving average is below the longer-term 200 SMA so the downtrend is likely to continue. In that case, EUR/AUD might make its way down to the channel support at the 1.4500-1.4550 levels. However, stochastic is starting to turn higher, hinting at a potential return in buying pressure. If so, a move back to the channel resistance might be underway and an upside break ain’t impossible if euro bulls charge.
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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.