Yo! I’ve got a couple of chart patterns on today’s intraday charts menu. To be more specific, I’m serving up a rising wedge on USD/JPY and a rectangle pattern on AUD/CHF. Get ’em while they’re still hot, dawg! Hot dawg. Get it? Never mind.
Back on Monday, we had a Fibonacci retracement setup on USD/JPY, which y’all can still see on that there chart. Back then, the pair was at the 50% retracement level at 111.30. And the pair has climbed higher since then, so it looks like our setup is workin’ out.
However, I also I told y’all back then to keep an eye on 112.00, since clearing that price level would confirm the uptrend. But as y’all can see, the pair failed to push past 112.00, so I’m beginning to doubt them bulls. Moreover, stochastic is just about to reach overbought territory. And most important of all, the pair is beginning to form a rising wedge pattern.
A rising wedge is a bearish chart pattern, so y’all better get ready to bail out of yo longs (if you have longs), especially if the pair smashes past 110.50 on strong momentum. You see, a breach of that price area means that bears are in control and are likely gunning for 108.50.
Our original Fibonacci retracement setup is still valid, though, so I’d stick with that for now while making contingency plans for a downside breakout from that there wedge.
As y’all can see, AUD/CHF has been consolidating in a rather tight 60-pip trading range or rectangle pattern, with resistance at 0.7310 and support at 0.7250.
If you’re planning to trade within the range, then heads up because the pair is currently at the channel’s support area. Also, stochastic is already signaling oversold conditions and all that, so bulls may be enticed to start jumping in soon.
But for the breakout chartists out there who are scoping that there chart for breakout possibilities, just know that the pair could break either to the topside or the downside. And looking at our technical indicators, they don’t really have a consensus at the moment. After all, stochastic is indicating oversold conditions, as mentioned earlier. Them moving averages, meanwhile, are in downtrend mode.
Anyhow, if a topside breakout occurs, then them bulls will likely be gunning for 0.7310. But if a downside breakout occurs, then bears will likely be shooting for 0.7150. In any case, just make 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.