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USD/CHF: 1-Hour

USD/CHF 1-hour Forex Chart
USD/CHF 1-hour Forex Chart

This setup is built upon yesterday’s flag pattern intraday setup on the 1-hour chart for USD/CHF. So before we begin, congratulations to all those who went long based on yesterday’s charts, especially those who went long on USD/JPY.

Moving on, I told you guys to observe how price reacts to the 0.9500 major psychological level. And, as recent price action has shown, the upside move on USD/CHF stalled when it reached that level. Also, as can be seen on the expanded chart, this price level has been a price area of very, very significant market interest.

For today’s play, I have two scenarios in mind: (1) price finds resistance and goes back down or (2) price breaks through resistance. In the short term, I think a downside move is more likely given how quickly the upside momentum vanished, but since this is the forex market, an upside move may also happen, especially if new fundamentals come around. Also, the 100 SMA and 200 SMA are already in uptrend mode.

GBP/CHF: 1-hour

GBP/CHF 1-hour Forex Chart
GBP/CHF 1-hour Forex Chart

GBP/CHF has been moving ever higher while encountering sellers along the way. As a result, an ascending channel has formed. The basic way to play this channel is to look for support near the bottom of the channel. And as luck would have it, price is currently near the bottom of the channel.

But will support form here? There is a possibility, yes. Price is currently at the price area of significant market interest around 1.4590 handle, so we may see buyers start to nibble. Also, the 100 SMA and 200 SMA have been in uptrend mode for a while now, and the 100 SMA is even serving as dynamic support. Lastly, stochastic indicates that sellers may potentially be exhausted since it’s currently in oversold territory.

It does seem like buyers have a hard time pushing price away from the 1.4590 handle, though, so make sure to prepare for a downside channel breakout just in case.

AUD/JPY: 1-hour

AUD/JPY 1-hour Forex Chart
AUD/JPY 1-hour Forex Chart

This is a simple bounce-from-resistance setup similar to the setup for USD/CHF above. After slowly moving down, price went up to test the 95.70 handle, a price area of significant market interest, as highlighted by the rectangle. Our directional bias is down because (1) this price level has been tested multiple times in the recent past, (2) the moving averages are in downtrend mode, (2) the 200 SMA is acting as dynamic resistance, and (4) stochastic is currently in overbought territory, indicating buyer exhaustion.

That’s a lot of technical arguments, and if you do find a trade opportunity based on this setup, make sure to practice proper risk management.

Forex Chart Settings:

Slow Stochastic: 14,3,3
100 SMA: Blue line
200 SMA: Red line

To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.

Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.