I’m looking at the 4-hour charts of USD/CHF and AUD/USD today to spot a potential turnaround from the recent moves in case dollar strength returns.
USD/CHF recently broke out of a descending triangle formation but was unable to sustain its upside momentum since. The ceiling at the 1.0100 major psychological level held like a boss and the pair tumbled back below parity after getting rejected.
Price seems to be moving inside a range on its 4-hour chart and is now setting its sights on support just above the .9850 minor psychological mark. The 100 SMA is below the longer-term 200 SMA, confirming that sellers are in control, while stochastic is on its way down.
However, the oscillator is already dipping into the oversold region and turning higher could draw buyers back to the mix. If so, the moving averages at the middle of the range might already hold as dynamic support and allow USD/CHF to move back up to the resistance.
Now here’s a trend setup that’s too sweet to miss! AUD/USD has been trending lower and moving inside a falling channel on its 4-hour chart with some confluence to boot.
The pair is in correction mode and appears to be bouncing off the 50% retracement level. If this area continues to keep gains in check, price could head back down to the swing low or until the channel support closer to the .7300 mark. The 100 SMA is below the 200 SMA and stochastic is turning lower, indicating that bearish pressure is in play.
Still, a larger correction could lead to an actual test of the channel resistance closer to the 61.8% Fibonacci retracement level and the .7450 minor psychological mark. The 200 SMA dynamic resistance should serve as the line in the sand for a pullback, as a break above that might mark the start of an uptrend.