USDCHF Analysis: Bearish below 0.9774
Last Thursday’s signals were not triggered, as there was insufficiently bearish price action when the resistance level identified at 0.9840 was reached.
Today’s USD/CHF Signals
Risk 0.50%.
Trades must be taken between 8am New York time and 5pm London time today only.
Short Trade Ideas
- Go short following a bearish price action reversal upon the next touch of 0.9774 or 0.9803.
- Put the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
- Go long following a bullish price action reversal upon the next touch of 0.9706, or 0.9664.
- Put the stop loss 1 pip below the local swing low.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Remove 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 last Thursday that the picture was bullish and that it made sense to maintain a bullish bias and to look for long trades following firm bullish bounces at any of the three nearby support levels.
This was a good call as the price continued to rise firmly and steadily over the 24 hours following my forecast.
On Friday as the New York session got underway, the Franc made a huge leap ahead along with all the other safe haven assets such as precious metals and the Japanese Yen, as the U.S. / China trade dispute took another turn for the worse.
Markets are in risk-off mode and that can be expected to continue to boost the Franc, or at least to prevent it falling in value. As such, despite the absence of any real trend in this currency pair, it makes sense to be bearish and to look for a short trade. The best opportunity looks likely to be at a reversal from the resistance level identified at 0.9774. I would take a bearish bias if that short entry sets up here.
There is nothing of high importance due today concerning the CHF. Regarding the USD, there will be a release of Core Durable Goods Orders at 1:30pm London time.