USDCHF Analysis: Weak Dollar drives price down
Yesterday’s signals were not triggered, as there was no bullish price action at 0.9885.
Today’s USD/CHF Signals
Risk 0.75%.
Trades may only be taken before 5pm London time today.
Short Trade Ideas
Go short following a bearish price action reversal upon the next touch of 0.9885, 0.9929, or 0.9950.
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 Trade Ideas
Go long following a bullish price action reversal upon the next touch of 0.9841 or 0.9815.
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 it looked as if the support at 0.9928 was about to break down, but the area may well hold. I think if the price broke below 0.9920 it will fall at least a bit further, but it was quite likely there will be little action until the FOMC release due later in the New York session.
This was a good call as we have seen the price move down further, initially due to the sell-off from the long-term resistant area at 0.9950, and then later due to the general weakening of the Dollar after the Fed signalled a more dovish approach to interest rates ahead.
The price is well within its long-term range and has no momentum left, so I have no directional bias today and I think any opportunities in the Forex market are likely to arise elsewhere today.
There is nothing of high importance due today regarding the CHF. Concerning the USD, there will be a release of CPI (Inflation) data at 1:30pm London time today, followed by testimony from the Chair of the Federal Reserve before the Senate at 3pm.