USD/CHF Forex Signal

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USDCHF Analysis: Topping out near 0.9946?

Yesterday’s signals were not triggered, as the bearish price action took place below 0.9946 but above the former resistance at 0.9933.

Today’s USD/CHF Signals

Risk 0.50%.

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

Short Trade Idea

  • Short entry following a bearish price action reversal upon the next touch of 0.9946.

  • Put the stop loss 1 pip above the local swing high.

  • Move the stop loss to break even once the trade is 20 pips in profit.

  • Remove 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

  • Long entry following a bullish price action reversal upon the next touch of 0.9893 or 0.9853.

  • Put the stop loss 1 pip below the local swing low.

  • Move the stop loss to break even once the trade is 20 pips in profit.

  • Remove 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 although the technical picture was weakly bullish, it was important to note that the area of resistance just above the current price was strong and had held firm over the medium-term. Therefore, the chance of a bearish reversal there remained high. It is a very good pivotal area and it was highly likely to be pivotal over the day.

This was a good call, as the price seems to have topped out just below 0.9946. However, it is unclear how much further the price will be likely to fall, as the market still has dominant risk-off sentiment which will tend to boost this currency pair. Much will now probably depend upon the U.S. inflation data due later. If that news causes a bullish breakout above 0.9950 and we get 2 consecutive hourly closes above that level, I would call a bullish breakout and take a long bias.USDCHFRegarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time. There is nothing of high importance due today concerning the CHF.

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.
Learn more from Adam in his free lessons at FX Academy.