Today’s USD/CHF Forecast
Risk 0.50% per trade.
Trades may only be entered before 5pm London time Thursday.
Long Trade Ideas
- Long entry after a bullish price action reversal on the H1 timeframe following the next touch of 0.9982 or 0.9911.
- 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 by price.
- Take off 50% of the position as profit when the trade is 20 pips in profit by price and leave the remainder of the position to run.
Short Trade Ideas
- Short entry after a bearish price action reversal on the H1 timeframe following the next touch of 1.0111 or 1.0139.
- 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 by price.
- Take off 50% of the position as profit when the trade is 20 pips in profit by price 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
The US Dollar has been in a strong long-term bullish trend and has begun to rise firmly again over the past day as fears mount over the persistence of global inflation and more hawkish policies from central banks. This has pushed the price of the USD/CHF currency pair higher, although the price has not quite reached the 2.5 year high which was made a couple of weeks ago not far from the current price level.
It is too early to confidently call, but we may be starting to see the price top out. Technical analysis shows that the price has peaked in the current price area on two earlier swings which were unable to break the 1.0066 level. This may hold as resistance, although I do not see it as an obviously strong key level.
There is little going on with the Swiss Franc. It is somewhat weaker than the Euro insofar as it is closer to its long-term lows, but what is most interesting about the Fran from a longer perspective is that it does not seem to be attractive as a safe haven anymore – it is truly only the US Dollar which manages to successfully attract that function this year.
This currency pair does not usually offer much in the way of sustained trends, so the smart move in trading it is usually to look for strong reversals from price extremes. As these resistance levels are at very long-term high prices, I will look for bearish reversals from any touch of 1.0111 or 1.0139, which are old and very-well established, and enter a short trade if I get a set up.
I think the price may well rise to 1.0111 today but will be likely to reverse at that area.
Concerning the US Dollar, there will be a release of Philly Fed Manufacturing Index data at 1:30pm today. There is nothing scheduled regarding the CHF.
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