First up on today’s forex chart pattern + Swissy double special is that there rectangle pattern for CHF/JPY. As y’all can see, the pair has recently been trading sideways while respecting resistance at 105.70 and support at 104.40, giving us a 130-pip trading range to play with. Anyhow, the pair is currently testing the rectangle’s support area, so you may want to start looking for opportunities to go long if you plan to play the range.
Stochastic looks good since it’s already indicating oversold conditions. However, the moving averages are still in downtrend mode, so you may want to play conservatively and wait for a bounce instead of jumping right in with a long, since the pair may attempt a downside breakout instead.
If you’re more of a breakout chartist, then you may like the next chart. You see, a neat-looking symmetrical triangle pattern has emerged on EUR/CHF’s 1-hour chart. And as a reminder, a symmetrical triangle could break in either direction, so make sure to prepare for both scenarios. In any case, the chart pattern is about 110-pips tall, so a breakout move in either direction may have enough momentum for the same amount.
I keep going back to this pair, huh? Anyhow, the pair broke to the upside from the descending triangle that we identified on NZD/CHF’s 1-hour chart in yesterday’s intraday charts update. However, the pair only moved higher by about 30 pips from its breakout point before encountering fresh sellers at the 0.7120 handle.
And if we look at the chart again while also considering yesterday’s bounce, we get what appears to be a tiny double bottom pattern. The pattern is only about 50 pips tall, so a topside breakout past the neckline at 0.7120 could potentially last for the same amount. Of course, the pair could move higher in excess of 50 pips. After all, the Fibonacci retracement setup that we identified back on Wednesday hasn’t been invalidated yet.
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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.