By: Doug Rosen
I am going to skip the weekly chart today since it is no different than yesterday and go straight to the daily. Yesterdays price action was not so significant so it really did not have much effect on the weekly chart, however, bearish conditions do exist.
Yesterday was a bit bullish for this pair, but it was merely a predictable retracement. It came back up and poked the daily 5 then closed just below the daily 21 and now the daily 5 is pointing down giving price a push to the downside. 0.8870 is a realistic area to see this pair fall to in the not so distant future.
If I did not trade with ema's (Exponential Moving Averages) I would probably think price would fall even more but I do believe in the power of ema's and that is why I do use them.
Moving over to the 4 hour chart I do want to point out that the same area I pointed out where price retraced back to on the daily chart, on the 4 hour chart was a perfect 61.8 fib overlapped with a 21 ema as well as a monthly pivot point.
There is no reason for price to stop falling just yet, at 0.8961 we will touch the weekly S2, this will cause a slight bounce up, so for those looking to short this pair this is where you want to be waiting. It will be the pullback you are looking for.
If you are looking for a brief scalp long, also, there should be some reaction there, maybe enough to snag 20 - 30 pips. Be careful around 0.8925, that may be a decent take profit area since it is yesterdays low.
I personally do not trade this pair, I use it as a proxy for the EUR/USD. Ultimately, you want to time a bounce of USD/CHF resistance with a bounce off of EUR/CHF and EUR/GBP support to take a long on EUR/USD.
You also want to have some support to bounce off of with EUR/USD and most likely you will if you time the other three pairs together. This is what I refer to as correlative trading, and in my opinion, is the most reliable method of trading.