Back on February 16, we had a Fibonacci pullback setup after a triangle break on the pair. And so we was lookin’ to go long when the pair reached the area of interest at 0.7630, since it lined up with the 50% retracement level. Well, as y’all can see, 0.7630 did act as support, and so the pair climbed higher.
Now, if we take the most recent price action into account, it looks like a fresh ascending channel has formed. Not only that, the pair seems to be hugging the channel’s support area. Normally, I’d tell y’all to start lookin’ for opportunities to go long. However, the major psychological level at 0.7700 that we’ve been watchin’ seems to be acting as resistance. Furthermore, stochastic has just left overbought territory. Moreover, them moving averages have just recently crossed-over into downtrend mode. These all imply strong bearish interest.
Given all that, we have two scenarios in mind for today. The first is a bullish continuation scenario. And the pair needs a clean break past 0.7700 for that for the scenario to be confirmed. As for the second scenario, well, that’s obviously a downside channel breakout. Just note that only the most gangsta forex traders should short when the pair attempts a downside channel breakout. For the more conservative forex traders out there, you may wanna wait for a strong, clean break past 0.7630 or a break-and-retest, also of 0.7630, before jumping in.
We also had a triangle for GBP/CHF, which we first identified back on Monday. And since then, the pair moved higher for over 160 pips, staging an upside breakout in the process. Only problem is that the pair failed to smash past 1.2600 with great momentum. Heck, the pair is currently milling about in that price area. This means that them bulls intend to push the pair higher, but them bears are giving the bulls a really hard time. And so it’s only a matter of time before one side gives way.
Anyhow, we’re still bullish on the pair. But if we take the most recent price action into consideration, we can see that an ascending channel has also formed. And as it turns out, the pair happens to be at the channel’s resistance area. There’s therefore a chance that the pair may fall back down all the way to the channel’s support area. However, there’s still a chance that them bulls fill finally chase away them bears and continue moving higher. In any case, just make sure practice proper risk management as always, a’ight?
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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.