Forex Top 3 Chart Setups: U.S. Dollar Gains Strength while the Kiwi Weakens

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.

Top Chart Setup #1: Greenback Heavy over Yen

Taking a look at a daily chart of the USD/JPY, we see that the U.S. dollar has certainly had a run of it lately... At present, the USD/JPY has tagged the top end of the relevant range, while putting in a "doji", in terms of candlestick patterns. What's more, momentum indicators are beginning to look overbought at present levels. It's likely that the USD/JPY could travel higher, though in the short-term a pullback may be looming, to let the pair cool off.

Top Chart Setup #2: Just Call Me Franc

The below daily chart of the franc and yen shows the Swiss currency has posted gains against the yen, much like the U.S. Dollar. However, with momentum indicators showing signs of tired buying, the pair may also be in for a pullback, before traveling higher. Unlike the USD/JPY, the CHF/JPY is sitting on lateral support, which may prove difficult for bears to pierce. However, a dip from present levels would actually be a healthy occurrence, opening the door for higher ground later on.

Top Chart Setup #3: Don't Count the Kiwi Out Just Yet

The below chart of the NZD/USD shows the "kiwi", or New Zealand Dollar has fallen through the floor over the past two weeks. At this point, New Zealand bulls may be looking for a dead cat bounce into the .7600 area, before kiwi bears regain control of the reins.

Given the overall volatility within currency markets lately though, we probably don't want to rule out an exaggerated move up into the upper Bollinger Band at .7740. Conversely, if the .7400 area is breached, bears could be showing such immense strength that even technicals might not hold the kiwi up.

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