Yesterday’s signals produced a profitable long trade from the inside candlestick on the hourly chart which rejected the support level at 0.9985.
Today’s USD/CHF Signals
Risk 0.75%.
Trades may only be entered before 5pm London time today.
Short Trades
Short entry following a bearish price action reversal upon the next touch of 1.0025 or 1.0058.
Place the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trades
Long entry following a bullish price action reversal upon the next touch of 0.9985, 0.9971 or 0.9957.
Place the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
USD/CHF Analysis
I wrote yesterday that the outlook was generally bearish but the support at 0.9985 may produce a strong double bottom that could see the beginning of a change. There are three support levels between there and 0.9957 which could well be hard to break, so I would not take a bearish bias unless there is a retracement and another rejection of 1.0025.
This was a good call as the strong double bottom at 0.9985 did play out. The price now seems to have edged just above the upper trend line of the medium-term bearish price channel shown in the chart below, which would be a bullish sign, but this is still unclear. A clearer break above would be a sign that the price will be likely to go on to rise to test the nearest resistance level at 1.0025, but that level could well hold and provide a good short trade opportunity. I would take a bearish bias if there will be a strong bearish rejection of that level later.
There is nothing of high importance due today concerning the CHF. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time as well as testimony before the Senate from the Chair of the Federal Reserve.