USDCHF Analysis: Bullish double bottom formation at 0.9873?
Yesterday’s signals produced a profitable long trade entry from the bullish pin candlestick on the hourly chart which rejected the support level at 0.9873. It may be wise to take partial profit now as I have little confidence in the strength of any bullish movement.
Today’s USD/CHF Signals
Risk 0.50%.
Trades must be entered between 8am and 5pm London time today only.
Short Trade Ideas
⦁ Go short following a bearish price action reversal upon the next touch of 0.9915, 0.9931, or 0.9960.
⦁ 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 0.9873 or 0.9820.
⦁ 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 chart was dominated technically by a pivotal point at 0.9915 which could provide at least a short scalping trade if we got a bullish retracement to it, but scalpers should be conservative here with profit targets for such trades. This was a good call as the high of the day was made just 1 pip below this level which I identified as pivotal.
I was also correct to take no directional bias on this currency pair as both the nearest support and resistance levels held.
The picture is a little more bullish, or a little less bearish, as we now have a bullish double bottom which formed at the nearby support of 0.9873.
As today is extremely likely to be a quiet day in the Forex market, I see both 0.9873 and 0.9915 as very likely to survive any test, so again, scalping from bounces at either of these key levels will probably be the best approach to trading this currency pair. Again, I take no directional bias.
There is nothing of high importance due today concerning either the CHF or the USD.