Recap of the previous week.
The just ended week was a good one. USDJPY broke above the marked resistance a flew. EURUSD was a latecomer to the party as it also broke the and retested the resistance of the channel towards the end of the week to end up bullish. CADJPY didn’t meet expectation as it followed the USDJPY but neither did it meet the requirements for a short entry too.
The upcoming week promises to be an interesting one as correlation would be in play on the selected currency pairs. Featured are two CAD and CHF pairs each.
The charts in focus for this week are USDCAD, USDCHF, CADCHF and EURCHF.
USDCAD currently has found itself at a confluence of support. On the daily timeframe, a trendline that extends from December 2019 till now has price testing it. On the 4H timeframe, price rests on a trendline that extends from two weeks ago (As evidenced in the multi-timeframe analysis in the video).
The confluence of support comes in at the 1.3202 area. It’s now a matter of whether it will hold or break. I would be more interested in trading the break.
This pair has been trending upwards since it found support on the last day of January this year. Out of the uptrend came a rising wedge. The support of the wedge was massacred on Friday; USDCHF now sits comfortably below the support.
I am bearish this pair as long as it is below the support of the rising wedge. For entries, look for pullbacks into the 0.98 area; if not a close below Fridays low on a 4H timeframe basis could act as bearish confirmation.
Similar to the USDCHF, the CADCHF has also been in an uptrend for almost the same period. Just that this time, the trend has produced an ascending channel. I am bearish this pair as well and for entries, look for pullbacks towards the 0.74 area.
Pullbacks may never come; so in case we do not get a pullback, a 4H close below Friday’s low could be the bearish confirmation.
EURCHF tends to be my favorite pick for this week’s forecasts and I don’t even know why I decided to put it last :D. It’s my favorite pick for the week because it is the only CHF pair that hasn’t broken out yet.
This pair stayed quiet throughout last week, but it was so for a useful reason. The tight range has produced a flag (or a descending triangle if you may). Whether this flag is bearish or bullish, the direction of the breakout would tell.
The downside to this trade idea are false breaks.
I wish you a profitable trading week.