We had two major scenarios for CAD/CHF back in Wednesday’s intraday forex charts update. The first scenario is that 0.7600 would hold as resistance and the pair stages a downside channel breakout. The second scenario, meanwhile, is that the pair would respect the ascending channel. And, well, it looks like the pair followed the second scenario. Heck, it even staged an upside channel breakout. And if you were gunning for the channel’s resistance area, then you would have easily harvested 80 pips. But if you let your profits run, then you would be in the green for about 130 pips by now. Either way, congratulations are in order.
Anyway, the pair has now reached 0.7730, which is a price area with very significant market interest. You see, 0.7730 has been acting as resistance for a long time. And the pair tried to break past it back on November 2015 and then on April and May 2016. All attempts failed, however. We are therefore expecting a possible reaction sooner or later, which may result in a pullback. And if a pullback does occur, then all three Fibonacci retracement levels look like good potential pullback areas. Although the 61.8% retracement level would probable the most conservative since it sits right smack on the 0.7650 minor psychological level.
Next, USD/CHF was testing the rectangle pattern’s support at 1.0080 back on Monday, so we were looking to go long. However, the pair tried two unsuccessful downside breakout attempts first before skyrocketing higher. And if you were able to ride the swing higher all the way to 1.0190, then I’m sure you’re pretty happy with your 110 pips.
And since the pair is back at the rectangle’s resistance area, y’all therefore better start looking for opportunities to go short. Just note, however, that the two failed breakout attempts and the fact that the price has been closing above the moving averages are signs that bullish interest is strong. There is therefore also a chance that the pair may stage an upside rectangle breakout. Stochastic is already signaling overbought conditions, though, so that’s probably unlikely for now.
Finally, we’ve got what appears to be an ascending channel forming on GBP/NZD’s 1-hour chart. The pair has to climb higher to validate the pattern, so more conservative forex traders may wanna sit this one out for now. For the more gangsta forex traders out there, just know that the channel’s support area lines up with the 1.7510 handle. And the said handle appears to be well-defended by bulls, having acted as support for a while now. Stochastic is already indicating overbought conditions, though, so there’s a chance that bears will jump in and invalidate the pattern before it forms. So as usual, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, okay?
Forex Chart Settings:
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.