USDCHF Analysis: Consolidation likely
Last Thursday’s signals produced a profitable long trade from the bullish bounce at the support level of 0.9820. It would probably be wise to close out the remainder of any floating profit now.
Today’s USD/CHF Signals
Risk 0.50%.
Trades must be entered between 8am and 5pm London time today only.
Short Trade Idea
Go short following a bearish price action reversal upon the next touch of 0.9933.
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 Idea
Go long following a bullish price action reversal upon the next touch of 0.9853.
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 due to the prevailing ranging behaviour in this currency pair,
I would again avoid trading this pair but if I had to, I would look for a long trade entry at bullish price action when either 0.9800 or 0.9774 were reached. This wasn’t a bad call as although I was wrong about the precise level, I was correct about the more probable directional movement: upwards.
The price is now looking weakly bullish but is halfway between the nearest support and resistance levels. It therefore seems we are going to have a range within a range, i.e. consolidation within this area. It is a Monday with no major news scheduled and that is another reason why we are unlikely to get much directional movement today. I see this pair as best avoided by traders right now.
There is nothing of high importance due today concerning either the CHF or the USD.