Yesterday’s signals produced a profitable short trade from the bearish rejection of the resistance level at 0.9926.
Today’s USD/CHF Signals
Risk 0.75%.
Trades may only be taken until 5pm London time today.
Short Trades
- Go short following a bearish price action reversal upon the next touch of 0.9955 or 1.0011.
- 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 0.9926 or 0.9848.
- 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 picture was still bearish, but that despite the downwards momentum, this area of support levels which has now almost been reached will probably be challenging for the bears and halt the decline, at least temporarily.
This was an excellent call as it reflects what happened over the past 24 hours – a continued move down to new lows after a rejection of an identified resistance level at 0.9955, followed by a strong and sharp recovery in the price.
The outlook now is much less certain. A sustained break above 0.9955 would be a bullish sign, so I think this level is quite likely to be today’s pivotal point. Another move down to the lows would not be a big surprise, but I take no directional bias on this pair today.
There is nothing important due today concerning either the USD or the CHF.