Ready to put on your charting hats?
Which setup will you most likely trade?
NZD/USD has been trading in a downtrend since late May but the bears really put the pedal to the metal last week when they dragged the Kiwi down to the .6925 levels.
NZD/USD has recovered a few pips since then and it looks ready for a retest of the .7025 inflection point. As you can see, the area lines up with Fib retracement levels and the broken channel support.
Will we see a break-and-retest scenario in the next trading sessions? Kiwi bears can wait for a trip to the .7000 psychological handle before placing short orders and targeting June’s lows.
Pullback alert! EUR/CHF is having trouble making new June highs above the 1.0950 handle, which makes sense because the psychological level lines up with the 200 SMA on the 4-hour time frame.
What makes the swing trade setup more interesting today is that there’s also a bearish divergence poppin’ up on the chart.
What do you think? Will EUR/CHF extend its downtrend? Shorting at current levels would give you a good risk ratio especially if the euro drops back to its June lows.
Meanwhile, euro bulls would have to wait for a clear break above the SMAs before targeting areas of interest like the channel resistance or the 1.1000 inflection point.