USDCHF Analysis: Bearish on flight to safety
Last Thursday’s signals were not triggered, as there was no bullish price action at any of the support levels which were reached.
Today’s USD/CHF Signals
Risk 0.50%.
Trades must be taken between 8am and 5pm London time today only.
Short Trade Ideas
Short entry following a bearish price action reversal upon the next touch of 0.9840 or 0.9876.
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
Long entry following a bullish price action reversal upon the next touch of 0.9725 or 0.9702.
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 we were entering into a more bullish scenario as we had a key technical bullish breakout beyond the 0.9950 level. I was prepared to take a bullish bias if we had gotten a firm bounce following a bearish retracement to any of the nearby support levels. Luckily, there was no bullish price action at any of the levels which were reached.
Soon after I made last Thursday’s forecast, there was a complete and strong bearish reversal as the U.S. announced new tariffs on Chinese goods, and China has announced new retaliatory measures in recent hours. This has created a major change in market sentiment towards a strongly risk-off mode, which tends to boost safe-haven assets such as the Swiss Franc, and this is what happened here. This goes to show that you can make a solid analysis, but a major economic event can occur in an instant that completely reverses everything.
The price has quite a long way to fall before reaching the nearest support level at 0.9725, and it looks as if lower prices are going to happen during today’s London and possible also New York session.
There is nothing of high importance due today concerning the CHF. Regarding the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time.