USD/CHF has been trending lower in the past few days but it seems to be having difficulty sustaining its decline past the .9100 major psychological support level. With that, a pullback might be in the works, possibly until the falling trend line on the 1-hour time frame.
The 61.8% Fibonacci level lines up with the .9200 major psychological level, which has acted as support in the past. However, the 38.2% level lines up better with the falling trend line and might also act as resistance.
Stochastic is already in the overbought region, suggesting that the selloff could resume anytime soon. Switzerland is set to print its UBS consumption indicator today and an improvement for the month of August could allow USD/CHF to decline again.
NZD/USD: Break and Retest Scenario (September 26, 2013)
NZD/USD has retreated from its recent rallies, as bulls are unable to take the pair significantly past the .8400 major psychological resistance.
Since then, the pair has sold off to the .8250 minor support but could be in for more losses, as it approaches the Fibonacci retracement levels. The .8100 area, which is in line with the 50% Fib, could act as strong support since it is in line with a broken resistance level.
Stochastic is already in the oversold region with a slight bullish divergence, signaling that the selloff could reverse soon. Going long at .8100 with a 100-pip stop and a target of .8400 would be a 3:1 trade.
USD/JPY: Rising Channel Support (September 27, 2013)
USD/JPY has been climbing slowly inside a rising channel on its 4-hour time frame, and is currently testing the bottom. In addition, price has formed a bullish divergence with higher lows while stochastic made lower lows, suggesting a continuation of the climb.
Stochastic is already moving up but hasn’t reached the overbought zone, which means that dollar bulls still have enough energy to push the pair up, at least until the middle of the channel around 100.00.
A buy order at the top of the recent consolidation and a stop below the channel could offer a good reward-to-risk ratio. Aiming for the middle of the channel is a reasonable target for an end-of-the-week trade, as the rally could gain traction towards the U.S. session. A longer-term trader could aim for the top of the channel or the previous highs around 101.50.
USD/CHF just broke below the key .9100 handle on Friday’s dollar weakness, but the pair might be due for a quick pullback before heading any lower.
The 1-hour chart shows that the former support at .9100 lines up with the 61.8% Fibonacci retracement level, which makes it a good area of resistance. Stochastic is in the middle, suggesting that dollar bulls have enough energy to push for a retest of .9100.
There are no major reports from Switzerland and the US so ongoing trends might continue. Take note that the US debt ceiling deadline is approaching and a potential government shutdown could weigh on the dollar.
Shorting at .9100 with a 50-pip stop and a target of .9000 would be a 2:1 trade.
USD/JPY has been trading inside a rising channel for quite some time but the range broke earlier this week. This suggests that a downtrend might be in the works, possibly after a quick retest of the broken support.
On the 4-hour time frame, stochastic is still climbing, which suggests that dollar bulls or yen bears are still in control for now. The broken channel bottom is around the 99.00 major psychological level, which could act as resistance from now on.
Bear in mind that the U.S. economy is currently facing a potential government shutdown, as lawmakers are unable to reach a deal on their debt ceiling plan. Further conflict could weigh on the dollar, as a government shutdown has negative effects on growth and overall economic performance.
GBP/USD was rejected at the 1.6250 minor psychological resistance yesterday, as pound bulls need to gather more energy before pushing this pair higher.
The pair could retrace to the 50% Fibonacci retracement level on the 1-hour time frame, as it is in line with the previous resistance at the 1.6150 minor psychological level. Stochastic is already in the oversold region, although it has yet to cross upwards, which suggests that the pair could still dip a little lower.
UK manufacturing PMI came in weaker than expected yesterday, adding to selling pressure on the pair, but the ongoing US government shutdown is expected to be dollar negative in the near term.
A long order at 1.6150 with a stop below 1.6100 and a target of 1.6250 would yield a good reward-to-risk ratio.
AUD/JPY is making a reversal pattern on its 1-hour time frame, which means that the current downtrend could be turning.
The pair has formed a double bottom formation on the 91.00 major psychological level but the neckline at the 92.50 minor psychological resistance has yet to be broken.
Stochastic is in the overbought region, which means that the pair could dip a little lower before getting enough energy for a test of 92.50. From there, stronger buying pressure could eventually trigger a break of the neckline and the start of an uptrend.
The double bottom is 150 pips tall so the resulting breakout could be of the same size. Going long at market and aiming for the 92.50 mark then for 94.00 could yield a good reward to risk with a stop below 91.00.
A double top pattern has formed on GBP/USD’s short term time frame, which means that a possible reversal from the current uptrend could happen.
The pair is still holding steady above the neckline around 1.6175 but a breakdown might confirm that a selloff would happen in the coming days. The pattern is about 120 pips in height so the resulting breakdown might be of the same size.
A short order at the 1.6150 minor psychological support level could be enough to catch the breakdown and yield a good reward to risk ratio if one aims for 100 pips. A stop at the 1.6200 handle above the neckline would mean a 2:1 trade.
GBP/USD suffered a sharp selloff on Friday but it appears that the longer-term uptrend is still intact, as evidenced by the rising channel on the 4-hour time frame.
The pair is hovering around the middle of the channel around the 1.6050 minor psychological support while stochastic is already in the oversold region. The stochastic hasn’t crossed upwards yet so a deeper slide might be in the cards.
The pair still has a chance at testing the channel support around the 1.5900 major psychological support before resuming its climb. A long order at 1.5900 with a 100-pip stop and a target of the previous highs around 1.6250 would yield a 3.5-to-1 return on risk.
AUD/USD could be in for a decline today as the .9450 minor psychological level has been holding well as resistance so far. A drop could last until the recent support around the .9350 minor psychological level.
The intraweek resistance is in line with the top of a triangle on the 1-hour time frame while the potential support at .9350 is found at the bottom of the triangle.
Stochastic is in the overbought zone and moving down, hinting at a potential selloff. There are no major reports due from both the US and Australia today so the ranges could hold.
Shorting at .9450 and having a 50-pip stop with a 100-pip target would be a 2:1 trade for the day.
