Wassup, dawg? I’ve got something that the real gangsta traders among y’all may like. Specifically, I’ve got a bullish pennant for EUR/CAD and a bullish flag for CHF/JPY. Check ’em out!
As y’all can see, EUR/CAD surged higher before starting to mill about while tapering to a point. In the process, a bullish pennant appears to be forming. As it says on the tin, a bullish pennant is a bullish chart pattern, so we be lookin’ to go long on the pair when an upside breakout occurs.
Currently, our technical indicators seem to favor further moves to the upside since stochastic is pointing back up again while them moving averages are signaling a healthy uptrend. And should a breakout occur, then the pair may have enough steam for a 300-pip or a whopping 800-pip run, depending on how y’all measure the pennant’s staff or mast.
With that said, there’s always a risk that the pair may break to the downside instead. So if the pair smashes past 1.4702 on strong bearish momentum, then all bullish bets are off, since that means that them bears are likely gunning for 1.4550 or even 1.4450. In that case, y’all may even wanna consider switching bias.
CHF/JPY also zoomed higher before getting blocked at 112.20. However, them bulls were quick to set up at 111.60. And so the pair began to trade sideways as a result, forming that there bullish flag.
The bullish flag is like the bullish pennant’s cousin or something, so we’re also mainly bullish on the pair. And if an upside breakout does happen, then the pair could potentially move higher for 200 to 400 pips, depending on how y’all draw the flag’s “pole”. However, just keep an eye on how CHF/JPY reacts to 113.70 (if or when the pair gets there) since that price area has seen significant market interest in the recent past.
As usual, there’s also a chance for a downside breakout. And currently, there’s a possibility that such a scenario will play out since stochastic is moving back down after visiting overbought territory. The pair needs to smash past 111.60 on strong momentum, though. And if that does happen, then bears will likely be shooting for the 110.00 major psychological level. In any case, just make sure to practice proper risk management, 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.