USDCHF Analysis: Price back up above 0.9700 support level
Yesterday’s signals may have produced a losing long trade from the bullish pin candlestick which initially rejected the support level I had identified at 0.9702.
Today’s USD/CHF Signals
Risk 0.50%.
Trades may only be entered before 5pm London time today.
Short Trade Idea
Go short following a bearish price action reversal upon the next touch of 0.9791.
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 run.
Long Trade Ideas
Go long following a bullish price action reversal upon the next touch of 0.9706, 0.9664, or 0.9637.
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 run.
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 price had continued to range and while the Swiss Franc was strong as were all safe-haven assets, it seemed that the support confluent with the round number at 0.9700 was strong and would be hard to break. I therefore thought that the best opportunity may well be a failed breakdown of 0.9700 which quickly reversed and gave a long entry opportunity, although it probably won’t get very far. I had no overall directional bias here.
This was a good call as the support did initially break down but recovered and now seems to be again using that area around the round number as support, although the bullish recovery wasn’t very fast which makes it more suspicious.
Overall, we seem to have a technically confused picture, and although the market is still in risk-off mode, it does not seem to be benefitting the Swiss Franc much. Therefore, I would avoid trading this currency pair today, and I have no directional bias.
There is nothing of high importance due today concerning the CHF. Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time.