Can you guess where USD/CHF is right now?
If you answered “near the .9850 area that’s been significant for USD/CHF bulls and bears for YEARS,” then you deserve a pat on the back!
What makes the psychological handle interesting today is that it lines up with a range support that hasn’t been broken since September. Not only that, but there’s also a bullish divergence on the 4-hour chart!
Oh, and check out stochastic and Williams %R both showing USD/CHF’s “oversold” conditions on the 4-hour time frame:
Buying as soon as USD/CHF pops above the range support would give you a big reward-to-risk ratio especially if you place your stops just below .9850 and target the range resistance just below parity.
If you’d rather trade a downside breakout, however, then you better make sure you’re trading a clean break or even a break-and-retest situation! You wouldn’t want to trade a fakeout, would you?
EUR/JPY: 4-hourAfter getting rejected at the 120.70 zone, EUR/JPY looks set to drop lower.
The move is convenient for euro sellers who must have seen a bearish divergence and that 120.70 lines up with a channel resistance on the 4-hour chart.
Will EUR/JPY extend its losses? Shorting at current levels would still make for a decent trade if EUR/JPY ends up making new December lows.
Not confident in shorting the euro? You can also wait for a break above the channel that we’re watching and aim for previous areas of interest closer to 121.25 instead.
Watch this one closely, yo!