USDCHF supported at 1.0050 as risk appetite makes a small recovery
Yesterday’s signals may have produced a losing trade from the bearish but very small pin candlestick which rejected the resistance level identified at 1.0081 yesterday.
Today’s USD/CHF Signals
Risk 0.75%.
Trades must be entered before 5pm London time today.
Short Trades
Go short following a bearish price action reversal upon the next touch of 1.0093 or 1.0130.
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 ride.
Long Trades
Go long following a bullish price action reversal upon the next touch of 1.0070 or 1.0053.
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 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 Swiss Franc had benefited from the “risk off” sentiment which dominated the market, so it seemed likely that the price was going to fall further over the coming days. I would take a bearish bias if there were two consecutive hourly closes below 1.0050 which would probably be today’s pivotal point. This never happened, and I was wrong about the price falling further – it turned around at 1.0050 and has risen back up through most of the support levels which it broke unexpectedly when it came down a couple of days ago.
Fear over risk due to the U.S. / China trade dispute is still high, but risky assets recovered a little yesterday. This pair is now going to be very sensitive to market sentiment over the trade dispute. If the resistance at 1.0093 keeps holding, the price will become more likely to resume its downwards movement, so that is likely to be today’s pivotal point.
There is nothing important due today concerning the CHF. Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time.