That there is an updated chart of our setup for CHF/JPY from Wednesday. And if y’all can still recall, I told y’all that the pair seems really reluctant to push away from 113.80. I therefore told y’all that ya may wanna prepare for an upside channel breakout scenario. Finally, I told y’all that if such a scenario plays out, then bulls will likely be shooting for the significant resistance level at 115.20. Well, that’s exactly how it played out.
Anyway, since the pair did finally reach 115.20, chances are good that the pair may be pulling back soon. And all the more so, given that stochastic is already indicating overbought conditions and all that. Those of ya who are gangsta enough may therefore wanna start lookin’ for opportunities to go short. Shorting here is a counter-trend setup, though, so more conservative forex traders may wanna wait for a pullback before going long instead. And if a pullback does occur, the 38.2%, 50%, and 61.8% Fibonacci retracement levels all look like good spots to watch, since they all line up with price areas of interest, as marked on the chart above. Do note, however, that if bearish momentum is strong enough to smash past 113.80, then ya may wanna consider bailing or even switching to a bearish bias. You see, if that happens, then that means that them bears are likely gunning for 112.50.
Wouldja look at that? As y’all can see, AUD/JPY has recently been trading higher while inside that there ascending channel. Now, the most conservative way to play an ascending channel is to look for opportunities to go long when the pair is close to the channel’s support area. But as y’all can see, the pair is currently at the channel’s resistance area. This means that traders who are gangsta enough have a shorting opportunity while more conservative traders may wanna chill for a bit.
Anyhow, the channel’s resistance area lines up rather nicely with the 87.00 major psychological level, which is another technical argument for resistance to form here. In addition, stochastic is already signaling overbought conditions and all that. And if resistance does form here and the pair starts pulling back, then them bears would likely be gunning for 86.20. Although the pair could go lower still. Okay, as usual, just make sure to practice proper risk management, a’ight? Oh, do note that there’s a small chance for a downside channel breakout. And if that happens, just keep an eye on 85.50. If the pair easily smashes past that, then bears would likely be gunning for 84.70 next.
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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.