Let’s begin our stroll down memory by taking a look at Wednesday’s descending channel setup for EUR/CHF. The pair was trading sideways between 1.0820 and 1.0760 back then. And, well, as y’all can see, the pair finally broke lower and is currently testing the channel’s support area. For today’s play, we are looking for the pair to go back up again. And the most likely pullback area is the broken support at 1.0760, as marked above. The said former support is also close to the channel’s resistance area, so the chance that sellers may be lurking there is higher-than-average. Moreover, the 100 SMA may act as dynamic resistance if or when price does get there. However, it goes without saying that going long here is a counter-trend setup. More conservative forex traders may therefore wanna sit this one out until the pair does get to 1.0760.
Next on our list is yesterday’s ascending triangle setup on GBP/USD. And as y’all can clearly see, the pair broke to the topside by moving over 200 pips since we last saw it. Anyhow, the pair seems to be getting bombarded by sellers already, which may cause a pullback. Assuming a pullback does occur, then the most likely pullback area is the broken resistance at 1.2540. And if we apply our handy Fibonacci tool, we can see that the 1.2540 handle lines up rather nicely with the 50% retracement level.
Out final destination for today’s stroll down memory line is Tuesday’s descending channel setup for GBP/CHF. Back then, I expressed worry that buyers may be waiting in the sidelines. Well, looks like I was right to be worried since the pair staged an upside channel breakout. Nevertheless, congratulations if you prepared for such a scenario. Anyhow, the pair may be turning lower sooner or later, since market interest at 1.2510 seems rather strong. And if a pullback does occur, the most conservative pullback area would be at the 61.8% retracement level, since it sits right smack on the area of interest at 1.2180.
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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.