Cable is confined in what looks like a triangle after rising by around 800 pips in the last couple of weeks.Can the bulls maintain control of the pair’s direction? We’re looking at a possible bullish pennant pattern on the 1-hour chart, which could translate to an extended uptrend for the pound.
An upside breakout could lead to retests of areas of interest like 1.2600 or even the 1.2800 levels.
But what if GBP/USD breaks below the consolidation AND the 100 SMA? Well, then you might want to keep your eyes peeled for potential visits to the 1.1900 or 1.1700 previous support levels.
Not sure on where you should place your stop losses? Check out MarketMilk’s GBP/USD volatility analysis for clues!
USD/CHF is having trouble making new highs above .9700, which isn’t surprising since the level is an area of interest on the daily time frame.
In addition to that, .9700 is only a hundred or so pips away from the 100 and 200 SMAs as well as a descending trend line that has been keeping the bears in check since April last year.Will USD/CHF see another trend line retest? Or are the last three candlesticks hinting that the dollar is about ready to go back to its downtrend?
Shorting at a trend line retest would give you the best reward-to-risk ratio if you’re betting on further dollar losses.
Of course, you can also short at market prices as soon as you see bearish momentum in case the bulls can’t reach the SMAs.
Think the dollar will see an upside breakout instead? You can wait for a trend line retest and see how USD/CHF reacts to the resistance. If you see a legit breakout, then I better not see you hesitating on those breakout plays!
Whichever bias you end up trading, make sure you follow your trading plan and that you manage your risk. The goal is to live to trade another day, remember?