USDCHF Analysis: Bullish breakout above 0.9950
Yesterday’s signals were not triggered, as none of the specified key levels were reached before 5pm London time.
Today’s USD/CHF Signals
Risk 0.50%.
Trades may only be entered before 5pm London time today.
Short Trade Ideas
Go short following a bearish price action reversal upon the next touch of 1.0033.
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 run.
Long Trade Ideas
Go long following a bullish price action reversal upon the next touch of 0.9950, 0.9933, or 0.9922.
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 run.
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 supportive zone stretching down to 0.9875 looked ripe for a bearish breakdown. However, overall, direction here looked very uncertain, and so I thought it would pay to be extremely cautious in trading this currency pair.
This was at least enough to stay out of trouble. In the end, the support held up and then the FOMC data release came which strengthened the U.S. Dollar almost everywhere. We now have a key technical bullish breakout beyond the 0.9950 so there is a much more bullish picture now. I’d be prepared to take a bullish bias today if we get a firm bounce following a bearish retracement to any of the nearby resistance levels. My only word of caution is to watch out for the parity level at 1.0000 which may be resistant, as well as the level at 1.0033 beyond that.
There is nothing of high importance due today concerning the CHF: it is a public holiday today in Switzerland. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.