Ready for more forex plays?
Today we’re checking out the U.S. dollar index’s break-and-retest situation while CAD/CHF edges closer to a major resistance zone.
Check them out!
CAD/CHF: 1-hour
First up is a nice and simple range play for ya.
CAD/CHF is about to hit the .6930 zone that has been a major area of interest for bulls and bears all year.
In fact, save for a spike in early January, CAD/CHF hasn’t consistently traded above the level since the start of the year.
Will the range hold for another day? Stochastic is saying “a solid maybe” as it hangs out in the overbought zone.
A rejection from the established range resistance could drag CAD/CHF back down to the .6880 mid-range or even the .6840 range support levels.
But if CAD sees enough buying to bust through the range, then you can bet that at least some traders will be eyeing the .6970 previous highs!
U.S. Dollar Index (DXY): 1-hour
I spy with my eye a break-and-retest drama unfolding! See, the U.S. dollar index recently broke a trend line support that had been valid for weeks.
DXY found support at 104.10, however, and now the index is trading closer to the broken trend line zone.
Are we looking at a break-and-retest setup here?
Aside from lining up with the broken trend line, DXY’s current levels are also near the 38.2% Fibonacci retracement of this week’s downswing.
Look out for the next red candlesticks, which could start a bearish momentum that might drag DXY to its weekly lows.
But what if the breakout is actually a fakeout?
If DXY trades back above the trend line AND the 100 and 200 SMAs, then you can consider aiming for the 105.00 area of interest or the 105.30 previous high.
