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Kay Van-Petersen
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Day trade
Trade view / 09 September 2016 at 7:23 GMT

USDCHF turning bullish for Fibonacci level move

Analyst / PIA First
United Kingdom
Instrument: USDCHF
Price target:
Market price:

Background

USD Index – The selloff was strongly rejected yesterday with a bullish outside bar posted on the four-hour chart close to our aforementioned support (or right shoulder). We really need to see a break of the neckline at 96.15 to confirm the medium- to long-term bullish bias for this pattern. 

Selloff rejected

USD Index 1
Source: Saxo Bank

However, looking at chart two we can note that 94.51 is a Fibonacci confluence area (78.6% pullback and a 161.8% extension). Although this is not a ‘perfect’ symmetrical pattern, it does offer us an immediate upside bias. We are now USD bulls. 

Shifting to a USD bull stance
USD index 2
Source: Saxo Bank

Taken a long trade in USDCHF and short in EURUSD this morning. Here is an explanation for USDCHF. EURUSD is virtually the mirror image:

Weekly – Trading with a bearish channel formation. However, the lack of a strong trend makes the assessment of this pattern as being corrective. Furthermore, we are seeing higher weekly lows, possibly forming a bullish ascending triangle pattern. We have trend-line resistance at 0.9878 then the formidable psychological Big Figure at 1.0000 (parity).

USDCHF weeklyUSDCHF W
Source: Saxo Bank 
 
Daily – The strong recovery of losses resulted in USDCHF posting a bullish Outside Day yesterday, a pattern that often indicates the end of a bearish run and the start of a new upward bias. This was close to previous support from the beginning of August at 0.9632.

Bullish Outside Day
USDCHF D
 Source: Saxo Bank

Four-hour chart – Highlights dip buying close to the 61.8% pullback level (of 0.9669). This was a previous congestion area. The end result was the pair closing back inside the trend-line support (and possible right shoulder) at 0.9700. Resistance is seen at 0.9895.

Four-hour chart
USDCHF 4
Source: Saxo Bank

Management and risk description

Parameters

Entry: long at 0.9718.

Stop: hard stop at 0.9645 or daily close below 0.9700.

Target: 0.9895.

Time horizon: 1-3 sessions

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more
09 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I would like to see a close above 0.9734 at 11am UK to keep the 'strong' bull story alive
09 September
bancodemon bancodemon
hi ian, wheres your stop on your eur/usd trade? thanks
09 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
its a long term trade 1.1370 at the mo
09 September
Dj TinTin Dj TinTin
so would l I'm in long at 9810 looking to break even
09 September
AlexF AlexF
Agree on the 0.9734. Also in this trade with and short eurusd. Overall take out from ECB is that if europe is not dovish why would be the Fed....and of course the SNB will be always the most dovish of all. Let's see as no clear trend so far this week....
09 September
AlexF AlexF
what is moving USD up as we speak ?
09 September
AlexF AlexF
also got back in usdjpy at 102.23
09 September
AlexF AlexF
DOLLAR-YEN: Further remarks from Kyodo that said the BOJ see benefits of
negative rates outweighing costs, gives dollar-yen a further boost to extended
session highs of Y102.58. Next resistance is seen at Y102.60/65 (Sep8 high,
55-dma). Euro-yen prints Y115.59 with techs seen at Y115.68/77 (Sep6 high, 76.4%
Y116.37-113.82.
09 September
AlexF AlexF
also oil possibly retracing is helping USD ?
09 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
would read too much into it. Think it is just following through USD buying from yesterday
09 September
AlexF AlexF
Hi Ian would you add to your position after the fed comment ? Compared to USDJPY it did not move yet enough
09 September
Ian Coleman - First 4 Trading Ian Coleman - First 4 Trading
I am very tempted yes. I am looking for small dips now to add-in.

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