Forex Top 3 Chart Setups for Tuesday: Bernanke Shakes Things Up

Forex Force with Mark Whistler

Mark Whistler is the founder of www.WallStreetRockStar.com and is the author of multiple books on trading. Mark's newest book, The Swing Trader's Bible - co-authored with CNBC/Fox News regular guest Matt McCall - will be on shelves in late summer, 2008. In addition, Mark also writes regularly for TraderDaily.com and Investopedia.com.

Sign up for a free trial to Forex Force with Mark Whistler, a twice-daily alert service from professional trader Mark Whistler featuring intraday and swing trading setups. Click here to start your free trial.

Top Chart Setup #1: Swiss Franc and the Dead Cat Bounce

Looking at a 4-hour chart of the USD/CHF, we see that the pair is overdue for a dead-cat bounce in the relative range. However, given that the overall trend is down, taking long positions here would certainly be risky without clear stop loss points. However, with slow stochastics indicating that a rebound is overdue, buyers might be able to take advantage of the situation. Keep in mind that trend traders will likely start piling on the shorts, as the pair approaches descending resistance.

Top Chart Setup #2: Battle across the Pond

Looking at a chart of the EUR/USD, we see that the euro has been slowly gaining ground on the pound for about nine months in the relevant trend... Now, bears are starting to put some pressure on the euro, as noted in the recent breach of ascending support - one of three trendlines on the chart. Continued follow-thru on the downside won't likely be apparent until the euro breaks below the lowest trendline indicating the 9-month trend. A breach of 0.7595 will likely have bears seeking a larger reversal. Until ascending support is breached though, the trend remains upward.

Top Chart Setup #3: Bernanke Kick-Starts Greenback

This morning, after Bernanke made extremely bullish U.S. Dollar comments to an IMF conference in Barcelona (via Webcast); the greenback made an immediate recovery, promptly taking our gains over the past few days from major currencies. At present, as the below chart shows, should the EUR/USD take out 1.5460 on the downside, traders could see another leg lower in the range.