After surging past the 135.50 minor psychological level, price found resistance at the 136.90 handle and began moving sideways inside a tight consolidation area, and forming a bullish flag in the process. As a bullish forex chart pattern, our primary directional bias is obviously to the upside. And the moving averages confirm our directional bias since they are showing a clear uptrend. Stochastic, meanwhile, is making its way to oversold territory, so forex traders who are bearish on the pair may be exhausted soon. In case a breakout does occur, the resulting rally would probably have enough momentum for a 160-pip move since that is the height of the flag and it’s pole.
After milling around inside a bullish flag for a while, price finally broke out to the upside. The moving averages are encouraging since they’re indicating a healthy uptrend. The only thing that worries me is that the breakout’s bullish momentum is not very convincing, probably because stochastic has already reached overbought territory. Stochastic is still pointing up, though, so forex traders who are bullish on the pair may still be in control. Still, the lack of momentum implies that there is a small chance that the chart pattern will fail, so take extra care. But if price does keep moving higher, then we may potentially see a 240-pip move since that is roughly the height of this chart pattern.
A bullish flag has formed on CHF/JPY’s 1-hour forex chart. And our technical indicators seem to be in our favor since the moving averages are clearly in uptrend mode while stochastic is already pointing up and moving away from the oversold region. Furthermore, it also looks like a double bottom has formed on CHF/JPY’s 1-hour forex time frame, with the neckline at the 125.00 major psychological level, which is also where the bullish flag is forming. I guess we’ll see soon enough if this double bottom + bullish flag combo will be validated or not. In any case, make sure to practice proper risk management should you find a trade based on this or any of the other charts, okay?
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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