During the first half of the day we saw AUDCHF move higher and break the nose of yesterday’s pin bar. However the close wasn’t so inspiring for the bulls.
That said, this move to the downside wasn’t all that surprising. Once a market breaks out of a channel it often retests the channel as support or resistance. In this case the top side of the channel, which was previously resistance, is now being tested as support.
Yesterday’s pin bar is still in tact so it’s time to see if the top of this channel can hold as support. I still favor .848 and .85 as key resistance levels to the upside.
Only a break of the tail from yesterday’s pin bar will invalidate the setup.
I mentioned yesterday that CHFJPY was officially on my radar and that we would need a break of 113 to confirm a potential short entry. Well, today the market closed below this level with conviction.
From here we’ll need to see a retest of 113 as new resistance with some bearish price action in order to justify an entry.
The next key support doesn’t appear to come in until 111.70, giving us 130 pips to play with should we get a retest of the 113 level.
GBPAUD has been pretty choppy lately so I’ve been somewhat ignoring this market. However today’s bullish pin bar looks fairly convincing as it is well-formed and occurred at a level I’ve been watching for some time.
I do like this market higher from here, but I would certainly expect a pullback into support around the 1.825 level and possibly lower. Any time you have a choppy market like this you should expect a decent retracement coming off of a price action signal like today’s pin bar.
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