Jump start this brand new trading week with these fresh setups on the long-term charts!
I’m seeing a couple of forex trend opportunities, plus a potential reversal on crude oil.
WTI Crude Oil: Daily
Crude oil bulls, watch out!
The rally seems to be running out of steam, as the commodity price is having a tough time busting through the record highs around $125 per barrel.
Are we about to see a selloff soon?
Price already fell through the bottom of its rising wedge support, hinting that a downtrend of the same height as the chart pattern could follow.
This might be enough to take crude oil back down to the major support around $100 per barrel, especially since Stochastic has been reflecting a buildup in selling pressure.
The oscillator has been hanging out in the overbought region for quite some time, so turning lower would confirm that oil bears are ready to paint the town red.
Then again, the 100 SMA is above the 200 SMA to signal that support levels might still hold. Better be quick about spotting reversal candlesticks and booking profits if you’re shorting!
AUD/NZD: Daily
This pair continues to cruise above its ascending trend line that’s been holding since the start of the year. Talk about a steady uptrend!
Another test of the rising support area seems to be in the works, as price is already dipping to the 38.2% Fibonacci retracement level. More buyers might be waiting around the 61.8% Fib that coincides with the trend line near 1.1000.
Stochastic is just starting to head south and has plenty of ground to cover before reflecting exhaustion among sellers.
Meanwhile, the 100 SMA is safely above the 200 SMA to indicate that the rally is more likely to resume than to reverse. If any of the Fibs hold, AUD/NZD could make its way back up to the swing high at 1.1165 and beyond.
GBP/CHF: Daily
Just how low can GBP/CHF go?
The pair is once again hitting a ceiling at the top of its descending channel visible on the daily time frame. Using the Fibonacci extension tool shows the levels that sellers might be aiming for.
The 38.2% extension is pretty close by and might hold as support near the mid-channel area of interest. Stronger bearish pressure could take GBP/CHF down to the 50% level at 1.2053 or the 61.8% Fib closer to the 1.2000 mark.
If pound bears keep at it, the pair might even continue to slide all the way down to the 76.4% level near the channel support or the full extension at 1.1816.
Stochastic is showing that sellers are just getting started while moving averages also confirm a continuation of the downtrend.
