Think dollar weakness could persist? You might wanna look at this upside channel breakout on EUR/USD and a momentum play on USD/CHF!
This pair has been on a steady uptrend since the start of the year, moving inside an ascending channel pattern visible on the 4-hour time frame. This time around, price looks ready for an even steeper climb.
Unless my eyes are deceiving me, EUR/USD appears to have broken above its short-term consolidation and the channel resistance around the 1.0950 minor psychological level. This signals that bulls are eager to charge without even waiting for a pullback to nearby support levels!
The 100 SMA has crossed above the longer-term 200 SMA to confirm that bullish momentum is getting stronger. Stochastic is pointing up, also indicating that buyers are in control of the game, but this oscillator is starting to dip into the overbought region to hint at rally exhaustion.
Here’s another bearish dollar setup you might be interested in. USD/CHF has been trading inside a descending channel since mid-November last year and is finally showing more bearish momentum.
Price recently broke below the consolidation at the mid-channel area of interest, confirming that sellers are stepping on the gas. This could be enough to take the pair down to the lows at the .9800 levels or onto the channel support around the .9750 minor psychological mark.
The 100 SMA is starting to cross below the 200 SMA to reflect increased selling pressure, possibly drawing more bears to the mix. However, stochastic is already sinking into the oversold region to indicate that sellers might want to take it easy from here.