+30 pips On Tuesday’s USD/CHF Recommendation
It has been an active day thus far across the forex majors. Economic events have hit the wires, bolstering volatility and opportunity for short-term traders. The Swissy has been no different, marked by a retracement against Wednesday’s rally.
In Tuesday’s forex U.S. overnight preview, I outlined a trading plan for shorting the USD/CHF from a key Fibonacci retracement level. After taking some early heat, this trade performed wonderfully posting a 1:1 R/R profit of 34 pips.
Let’s take a look at today’s technical roadmap and see if there is more opportunity to be had in the Swissy.
USD/CHF Technicals
We are beginning to see a pronounced “L” formation on the daily timeframe. The preceding downtrend is currently settling into a sideways rotational pattern.
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Price has rejected the 38% retracement of the intermediate downtrend at .9781. The presence of the .9800 handle certainly helped this level prove valid, attracting trend shorts to the market. Since the failed test of the 38% retracement, bearish sentiment has won the day.
There are two important levels to watch for the remainder of the week:
- Resistance(1): 38% retracement of current wave, .9781
- Support(1): Swing low, .9699
Overview: The short from .9774 was a challenging trade due the considerable immediate draw taken on the position. After the early heat subsided, the prevailing trend took over running price south.
For the remainder of today and tomorrow, I expect price to fall into a rotational pattern between the 38% retracement and swing low levels. If today’s intraday range closes inside of yesterday’s, then we will be poised for a consolidation trade tomorrow.
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