Welcome to mid-week trading, forex friends!
Today we’re checkin’ out USD/CHF’s short-term downtrend and a potential Double Bottom breakout on EUR/GBP.
What do you think? Are we about to see profitable moves from these pairs?
USD/CHF has been on a slow and steady downtrend since the start of the month but dollar bulls are giving trend playas an opportunity today.That’s right, USD/CHF is back at a tradeable level! Not only is the dollar flirting with the .9250 minor psychological handle, but it’s also just under the 1-hour chart’s 200 SMA and as well as a descending channel resistance that’s been solid for at least two weeks.
If you’re convinced that the bearish divergence on the chart will count for something, then you can short at current levels and aim for this week’s lows for a good risk ratio.
Not convinced that the dollar has room to weaken against the franc? Watch out for a clear break above the channel and the 200 SMA, which could bump up USD/CHF back to areas of interest closer to .9300 or .9325.
I spy with my eye a Double Bottom breakout in the making!EUR/GBP bulls are doing a good job of defending the .8425 zone, so much so that they’re forming a possible Double Bottom situation on the 4-hour time frame.
What makes the chart more interesting today is that the candlestick pattern’s “neckline” lines up with lows that held back in August.
A clear break above the .8460 neckline could boost the euro to the next inflection point near the .8500 psychological handle and 100 SMA.
If you see EUR/GBP making new October lows, though, then you should also be ready for trading plans that would target 2020 areas of interest like .8400 or .8350.