Wassup? As y’all can see, AUD/CHF has been steadily trading lower while bouncing up and down inside that there descending channel. And as I always say, one of the more conservative ways to play a descending channel is to look for opportunities to go short near the channel’s resistance area. And lucky us, since the pair is just about to get there. Y’all therefore better start lookin’ for opportunities to go short on the pair. And all the more so, given that stochastic is indicating overbought conditions and all that. Moreover, the channel’s resistance area is just above 0.7520, which is a price area with significant market interest. In addition, them moving averages would be acting as dynamic resistance if (or when) the pair does get there. Overall, plenty of technical arguments in favor of further downside moves. Know what I’m sayin?
And if the pair does resume moving lower, just make sure to keep a close eye on how the pair reacts to 0.7480 and 0.7440, since those are also price areas with significant market interest. As such, bulls would likely be waiting there to try and push the pair higher. And while an upside channel breakout currently appears very unlikely, just be ready to bail if the pair surges past 0.7550, since a strong move past that price level could be a sign that bulls are taking control.
That there symmetrical-ish triangle is actually pretty ancient (by intraday standards). And we first found it way back in January 13, which is almost three weeks ago. So, yeah, a pretty ancient forex chart pattern. Anyhow, the pair first attempted an upside breakout, but as I noted almost three weeks ago, a breakout ain’t confirmed until the pair smashes past resistance at 1.0760. That turned out to be good advice, since the pair sank back into the triangle, only to burst out the other side. And this time, the pair successfully smashed past support at 1.0690, thereby confirming the breakout. Congratulations are therefore in order if any of y’all were patient enough for this setup to play out.
And for today’s play, we’ve got a Fibonacci retracement setup in mind. After all, the pair did pull back to the broken support area at 1.0690. And if we apply our Fibonacci tool, we can see that the pair is currently at the 38.2% retracement level. Moreover, support at 1.0690 happens to sit right smack in the middle of the 50% and 38.2% retracement levels. Lookin’ at our technical indicators, we can see that the moving averages are in downtrend mode. Even better, the 100 SMA seems to be acting as dynamic resistance. Stochastic is kinda worrying, though, since it’s signaling oversold conditions. Anyhow, y’all just make sure to always practice proper risk management, a’ight?
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