Yesterday’s signals were not triggered, as the resistance level at 0.9961 was not reached until after London closed.
Today’s USD/CHF Signals
Risk 0.75%.
Trades must be entered before 5pm London time today.
Short Trade
Short entry following a bearish price action reversal upon the next touch of 0.9961.
Place 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.
Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trades
Long entry following a bullish price action reversal upon the next touch of 0.9894 or 0.9848.
Place 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.
Take off 50% of the position as profit when the price reaches 25 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 yesterday that the price remained mostly range-bound as is typical with this currency pair. Even though Switzerland is on holiday, I thought that it may be possible to trade rejections of key levels because there was a lot of safe-haven flow at present with strongly falling stock markets which would tend to generate abnormally high activity in Swiss Franc trading. Therefore, I would take no bias but would look for solid rejections of key levels in any direction.
This was a good call but unfortunately the chance did not come until well after the London close, with a bearish rejection of the resistance level at 0.9961.
The price chart below shows that there is no real change to the technical picture – the price is still very range-bound, so I would continue with the approach of being prepared to trade any rejection of a key level in either direction, with relatively conservative profit targets.
There is nothing important due today concerning the CHF. Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.