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Price Action Setups: AUDCHF, AUDUSD and CHFJPY

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Every once in a while a setup comes along where everything lines up the way you were hoping and this AUDCHF setup is no exception. I’ve been talking about this channel for some time now and I mentioned yesterday that the pair was starting to put pressure on channel resistance.

Sure enough the pair broke out from channel resistance today and in doing so formed a bullish pin bar. The 10 and 20 EMA are starting to separate and the pair has been in an uptrend since January.

So where do we go from here? For starters I’m expecting a pullback to at least .839, possibly lower. To the upside the recent high at .848 could give the bulls a good fight but I’m more interested in .85. Not only is this a psychologically important level, it’s also represented by two recent lows. One in late October of last year and the other in November.

There is one downside, however, and that is that this market has seen a lot of sideways price action lately. Typically I like to see a pin bar form with more space to the left. As it is there are a lot of minor resistance areas that the market has to break through to see higher ground. Still, I do think this is one of the better setups out there at the moment in terms of a setup with a price action signal.

With all of that said, just remember that this is the Forex market where anything can and will happen. So as good as this setup looks, it can fail, so be sure to remain diligent in your approach.

audchf pin bar

As we would expect, AUDUSD is also showing bullish price action off of a channel low. This is another channel that was mentioned a few days ago.

If the market is able to move off of the channel bottom I do think the .944 area will continue to serve as resistance. Tuesday’s low of .9347 may be a nice area to look for an entry to go long, should the market pull back that far.

audusd pin bar

Last but not least is CHFJPY, a pair that I rarely  trade. In fact I can’t remember the last time I traded this market.

It’s no coincidence that CHFJPY is hanging by a thread and I prefer AUDCHF over AUDUSD. The Swiss Franc isn’t doing so well at the moment, and in the case of CHFJPY the market recently broke 12-month trend line support.

If the market can close below 113 (another psychological level) it looks as though we might have a 130 pip range to play with. We would of course need a retest of 113 as resistance and some bearish price action to justify selling this market.

This one is officially on my watch list. See the last chart for a view of the weekly time frame.

chfjpy price action

CHFJPY weekly chart – a lot of room to the downside if we can get that 113 break.

chfjpy weekly price action

 

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