Last week was a week of comebacks. There were also small, mid-term corrections, going against the main long-term trend. Corrections are useful as they create an occasion to jump into a trade for those who were initially late. Thanks to corrections, they can open trades with more desirable prices.
The first example is the , where the price reversed to test the long-term up trendline as the newest resistance, together with the horizontal line of 0.973. On Friday, USD/CHF created a shooting star on the daily chart, which can be an invitation to go south. Currently, the price is creating a flag and the sell signal will be triggered, when the price will break its lower line.
A similar setup can be found on the , where we also had a pullback testing recent supports as closest resistances. The small difference is that here, the price created a shooting star on Thursday, not Friday. Currently, we are below three major resistances and as long as it stays this way, we do have a sell signal.
Those two setups are rather negative for the USD. Now, time for a one, which seems friendly for the , . Here, the price created a wedge in a downtrend and is currently close to its lower line. It seems that we also had a false breakout above the 1,12 and the major down trendline. Those factors are promoting a further decline, so as a consequence, the strengthening of the USD.
3 Forex Setups As USD Correction Comes To An End
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