USD/CHF Forex Signal

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USDCHF Analysis: Trend line confluence

Yesterday’s signals were not triggered as there was insufficiently bearish price action at 0.9850.

Today’s USD/CHF Signals

Risk 0.75%.

Trades may only be taken before 5pm London time today.

Short Trade Idea

  • Go short following a bearish price action reversal upon the next entry into the zone between 0.9855 and 0.9864.

  • 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 Idea

  • Go long following a bullish price action reversal upon the next touch of 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.

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USD/CHF Analysis

I wrote yesterday that the most likely scenario was a continued fall to anywhere between 0.9840 and 0.9815, with a bullish reversal happening somewhere in that zone, but I did not think we would see a lot of price movement anyway. This was a near-perfect call, as the price did almost reach the supportive level which I identified at 0.9815 before reversing to come back and challenge the confluence of resistance close to 0.9850.

The key technical issue is the confluence of resistance with the half-number at 0.9850, the bearish trend line, and the resistance levels between them, all of which is shown within the price chart below. If the price can get above all this and reach to 0.9865, it will probably have enough of a pop to get higher still, perhaps to the 0.9900 area. However, it looks at present like 0.9850 will hold and we will see the price drive down again to the 0.9815 support level.

I take no directional bias on this currency pair today.USDCHFThere is nothing of high importance due today regarding the CHF. Concerning the USD, there will be a release of Retail Sales data at 1:30pm London time, followed by minor speeches from the Chair of the Federal Reserve at 6pm and FOMC Member Evans at 8:30pm.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.