Based on yesterday’s retracement setup for USD/CHF, it looks like price is respecting the 38.2% Fibonacci retracement level. And for today’s play, I found that price began consolidating into a rising wedge, so our directional bias to the downside is further confirmed. The moving averages are still in downtrend mode, and the 100 SMA is even acting as dynamic resistance. Stochastic is also in overbought territory, hinting that sellers may start nibbling soon.
As y’all probably know, an ascending channel is a bullish forex chart pattern, and the conservative way to play an ascending channel is to look for support near the bottom of the channel. But price just recently bounced off the top of the channel and is going down, so this setup is a countertrend setup, and therefore only be for the stout of heart. There is a chance that an upside channel breakout may occur, though, since stochastic is currently pointing up and moving away from the oversold region, indicating that forex traders who are bullish on the pair may be wrestling control.
This is a plain vanilla Fibonacci retracement setup on EUR/USD’s 1-hour forex chart. After surging higher with sufficient and convincing bullish momentum, price suddenly got repelled when it reached the 1.1700 major psychological area. Price pulled back to the 38.2% retracement level and tried to rally unsuccessfully. Now, price is testing the 50% retracement level. Looking at our technical indicators, the moving averages are moving further apart, indicating a healthy uptrend. Stochastic, meanwhile, is already in oversold territory, so forex traders bearish on the pair may be exhausted already. As usual, make sure to practice proper risk management should you find a trade based on this or any of the other charts.
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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.AUD/CAD 1-hour Forex Chart