Up first is the potential double bottom on GBP/CHF’s 1-hour forex chart. As y’all can see, price tried to move past support around the 1.4660 handle twice but got repulsed on both occasions, thereby hinting at a potential double bottom. Price is moving up, but the bullish momentum is weak and the 100 SMA appears to be acting as dynamic resistance. Stochastic just moved away from overbought territory, but it’s pointing up again, so forex traders who are bullish on the pair may not have given up yet. Perhaps enough buyers will come in to break past the neckline at 1.4900, validating the forex chart pattern in the process. If the double bottom is validated, price could potentially move up for about 240 pips, which is roughly the height of the pattern. The weak bullish momentum is kind of worrying, though, since that could indicate that sellers are really putting up a fight, perhaps enough to cause a downside break past support at the 1.4660 handle.
Next up is this double bottom on AUD/CHF’s 1-hour forex chart. Price just moved past the neckline at the 0.6830 handle, but bullish momentum is rather weak, which is worrying. At least the 100 SMA failed to hold as dynamic resistance and price has been closing above that moving average, so the pair is certainly attempting to change the trend. Stochastic is worrying too since it’s currently indicating potentially overbought conditions, but it’s still pointing up, so forex traders who are bullish on the pair may not be exhausted yet. Discounting that wick, the height of the forex chart pattern is around 170 pips, so perhaps price may move for the same amount as well.
Finally, we have this validated double bottom on CAD/CHF’s 1-hour forex chart. Price milled around the neckline before going higher, but the bullish momentum seems convincing. Unfortunately for the pair, but fortunately for us, price found some sellers at the 0.7230 handle. This could mean a potential pullback. In anticipation of that, the 38.2% Fibonacci retracement level seems to be the most likely pullback area since it lines up with the previous neckline/resistance area around the 0.7170 handle. The moving averages are, of course, still in downtrend mode, but price has been closing above the 100 SMA. Stochastic has been overbought territory for some time now, and it’s pointing down, so perhaps the bulls may already be spent. In any case, the pair has only moved higher for about 70 pips, and price still has the potential to move higher since the height of the forex chart pattern is about 160 pips. 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