Let’s start the week off with a look at these swing setups on AUD/CHF, CAD/JPY, and silver.
Better keep these long-term levels on your radar!
First up is this freshly-formed double bottom pattern on AUD/CHF!
Will we see a breakout and reversal soon?If the pair is able to bust through the neckline at the .6400 major psychological barrier, we just might see a rally that’s the same height as the chart formation.
That’d be roughly 200 pips yo!
Technical indicators aren’t so sure about a bullish run, though.
The 100 SMA is still below the 200 SMA to indicate that the path of least resistance is to the downside. In other words, there’s still a pretty good chance that the selloff could resume.
Also, the 100 SMA appears to be holding as dynamic resistance near the double bottom neckline.
Don’t forget that Stochastic is closing in on the overbought region as well, suggesting that buyers might need to take it easy. In that case, AUD/CHF might still retreat to the lows at .6200 again.
Silver (XAG/USD): Daily
Any silver bears out there?
This precious metal is hanging out at the very top of its descending channel visible on the daily time frame, hinting that a continuation of the long-term slide is about to follow.
Stochastic is in favor of a selloff, as the oscillator has already started its descent from the overbought zone. It has plenty of room to move south before reaching the oversold area, so the commodity price could follow suit.
I’m also seeing a bit of bearish divergence, as Stochastic made lower highs while silver is making higher highs.
However, the moving averages seem to be bracing for a bullish crossover, as the gap between the 100 SMA and 200 SMA has narrowed significantly.
If that happens, silver could attempt to break past the channel top as more buyers are drawn in. Better keep your eyes peeled for breakout candlesticks past the $24 mark if you’re hoping to catch a reversal!
Last but certainly not least is this neat rising trend line on the long-term chart of CAD/JPY!
Mind you, this one extends all the way back to March 2020, so it’s a pretty solid support zone.
Will buyers defend it again this time?Stochastic seems to be suggesting so, as the oscillator is already pulling higher to reflect a pickup in bullish vibes.
It’s also forming higher lows while CAD/JPY makes lower lows, creating a bullish divergence that could attract more buyers.
Just be careful since the 100 SMA is turning lower and is closing in on the 200 SMA, suggesting that a bearish moving average crossover might be in the works.
If this materializes and the pair dips below the trend line and 96.00 handle, brace yourselves for a possible long-term reversal on this one!