Looking at a minor uptrend on the Dollar vs The Swiss Franc (USDCHF) that began in August this year, the prices have been trading within an ascending channel on the daily timeframe, where the main players are bulls. Recently the channel broke out below and had a confirmation the next day.
Market sentiment has changed from bullish to bearish after the breakout. Are we going to see lower prices possibly to the near term level? A retest to the channel support is a possibility as well, before price resumes the bearish trend.
For the past 5 years, the Australian Dollar vs the Japanese Yen (AUDJPY) pair has been on a downtrend on the weekly timeframe. Last month, prices broke out below a major level, and later formed an ascending triangle. The upper boundary of the triangle coincides with the major level which is a confluence. Price has been supported by the trend-line and resisted at the major level.
In such a scenario, we would be best placed to wait and act after the breakout. Bears may come in at the major level and push price lower to resume the bear market. Bulls may however continue with the rally causing a breakout of the triangle. Price action confirmation is key before we open any position.
Disclaimer: This analysis is for educational and general information only and not advice or a recommendation to trade or invest. Do your own research/analysis and don’t blindly enter trades based on the analysis.