Today we’re looking at not one, but TWO daily time frame setups. What do you think of USD/CHF and EUR/AUD’s forex charts?
EUR/AUD is now about 100 pips away from the 1.6350 handle, which is right smack at a range resistance that hasn’t been broken since September last year.
What makes the setup more interesting today is that there might be a bearish divergence on the daily time frame.
Shorting at current levels would give you a good reward-to-risk ratio especially if the pair ends up falling back to its 1.5350 support.
If you’d rather buy the euro, though, then you could also wait until EUR/AUD breaks above its June highs and trade a potential trip to new 2019 highs.
Whichever bias you’re trading, make sure you’re practicing good risk management habits, mmmkay?
Where my breakout traders at? After breaking below a trend line support, USD/CHF looks ready to give back some pips.
Before you buy the dollar like there’s no tomorrow, though, you should note that the 1.0000 major psychological handle could challenge the bulls.
For one thing, it lines up with the broken trend line support. What’s more, it’s also near the 100 and 200 SMAs at this point!
If you believe that we’re lookin’ at a potential break-and-retest situation here, then you can position your short trades along the trend line that we identified.
Think the breakout is actually a “fakeout” and that the dollar will eventually resume its uptrend? Watch how the pair reacts to a trend line retest and get ready with your long orders in case it trades above the trend line and the SMAs.