I’ve got another round of Fib plays on today’s set!
This time we’re looking at a trend setup on USD/CHF and a potential retest and reversal on NZD/USD.
Check them out!
USD/CHF: 4-hour
This pair has been cruising higher for a while now, but it looks like a correction is about to happen soon!
USD/CHF is stalling at the top of its ascending channel visible on the 4-hour time frame, possibly gearing up for a pullback to the Fib levels. Which ones should you look out for?
The 38.2% Fib is near the mid-channel area of interest and .9400 handle, which might be enough to keep losses in check if buyers are eager to return.
If you’re feeling conservative, better hold out for a test of the 61.8% Fib that’s right smack in line with the channel bottom. Stochastic has plenty of room to move south after all, so the pullback could keep going until oversold conditions are met.
The 100 SMA is above the 200 SMA for now, confirming that the uptrend is more likely to resume than to reverse. Also, these dynamic support levels line up with the channel support to add to its strength as a floor!
NZD/USD: 4-hour
Here’s one for the break-and-retest fans out there!
NZD/USD recently tumbled below its ascending trend line to signal that a reversal from the uptrend is in order. Price is bouncing off the .6715 area, though, so a retest of the former support might follow.
Using the Fib tool shows that the 50% level is near the broken trend line and the .6900 major psychological level, which might be enough to keep gains in check.
Technical indicators are pointing to a continuation of the slide, as Stochastic is approaching the overbought zone to reflect exhaustion among buyers. Turning lower would mean that sellers are taking over and ready to drag NZD/USD back down to the swing low or lower.
Oh, and did I mention that the moving averages made a fresh bearish crossover, too?
Make sure you set your stops properly if you’re trading this one since a break above the 61.8% Fib might mean that Kiwi bulls are charging again!
