Retracement alert! USD/CHF is hitting the 1.0050 minor psychological area, which lines up nicely with the 50% Fib on the 1-hour time frame. What’s more, it’s also near a rising trend line that’s been valid since the start of the year! Think the Greenback has seen enough retracement against the franc? A stop just below the 100 SMA could get you good pips if you think that the dollar will soon pop up. Of course, you could also wait for a trend line break if you’re one of them dollar bears.
Here’s a trend play my 4-year old nephew could trade with his eyes closed! GBP/CHF is currently trading along the 100 and 200 SMA support, which is right smack at a rising channel retest. It also doesn’t hurt that Stochastic is favoring the bulls with an almost oversold signal. A long trade with stops just below the channel might get you a good trade if you aim for the channel resistance. You could also wait for a downside break of the channel if you don’t believe that the pound would see any gains in the near future.
Here’s one for the pound bears! Right now GBP/AUD is having trouble breaking past the resistance, especially since it’s being supported by the 100 and 200 SMAs on the 4-hour chart. The cherry on top of this sweet sundae is that Stochastic is hanging out at the overbought territory. A tight stop above the mid-channel line could get you a decent reward-to-risk ratio but I wouldn’t recommend tightening anything with this pair. After all, currency crosses tend to be more volatile than the majors. Best keep your stops loose on this one!
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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.