Trade view /
08 March 2017 at 8:22 GMT
Looking to take a short trade in USDCHF this morning, and here is why:
Monthly – Nothing to take away from the monthly chart. Holding between two trend lines, with January's bearish outside month offering a mild negative outlook.
Weekly – Various formations here, most are conflicting:
1. Bearish ending wedge pattern (break of 0.9768 and the measured move is 0.9071 - important)
2. Bullish channel
3. Possible bullish cup and handle
Daily – The reverse trendline resistance keeps holding back the bulls, with traders selling into nearly all of yesterday’s initial rally. Trading has been mixed for 26 days, which is common in corrective formations. The most important long-term factor here is the 261.8% extension level lines up perfectly with the wedge target at 0.9071 (from 1.0341-0.9856).
Intraday (eight-hour) – The ending wedge formation and the fact that we rejected a level close to the 61.8% pullback of 1.0158 (from 1.0341-0.9860) keep the bears alive. Trendline support seen at 1.0044 (important for the day trade idea).
Intraday (30 minutes) – Impulsive selloff from yesterday’s high trade (1.0170). The move higher has been corrective and mild. A mild rally to 1.0143 is likely to post an intraday DeMark exhaustion 13 count. The 261.8% extension is seen at the base of the wedge (1.0045). A move through 1.0120 and the selloff is underway.
Management and risk description
Taking a short trade in USDCHF this morning. Trying also to leave a unit on for the long-term trade.
Entry: Sell at 1.0145 and/or a break of 1.0122
Stop: 40 pips combined
Targets: intraday 1.0045, long-term 0.9080
Time horizon: day trade and longer term
— Edited by John Acher
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