Quick Play: USDCHF, Short to the daily 50
Updated
1M - Price is at a historical S/R level around 1.00500. Although we do not have a reversal candle at this level yet, price is still sitting at this key level and the lower timeframes are starting to show a clearer picture of what USDCHF may do over the next week or two.
1W - The weekly chart is clearly sitting at a key S/R level. On this timeframe the level is adjusted slightly to be more relevant at 1.00000. In addition to being a historical level, this is also a round number which acts as a psychological barrier as well.
1D - Price action is in a bullish trend, but late last week we closed with a bearish engulfing candle off of key resistance. Based on the price action of all the timeframes together, we may see a move down to either the daily 50 or even the weekly 50 ema over the next couple weeks.
*DXY conern: the DXY has had some bullish pressure coming in which is also a concern. I do see a possible pullback coming but it may be short lived which could have an impact on how USDCHF moves. I will be keeping a close eye on the status of the USD to make sure it is not going to be powering up while trying to short USDCHF.
Summary: Due to the fact that there is no daily trend change confirmation to the downside and not a very strong weekly reversal candle, I would be cautious trying to push this trade past any daily S/R. If an intraday entry is presented, my trade plan would be to see how price action reacts to the next daily level at 0.99800, where the daily 20 is likely to be as well. If there is an intraday trend change back to the upside here, then I would look to take my profit and run due to the concerns outlined above. If there is no intraday trend change and the intraday charts trend to the downside, then I would look to push this to the daily 50 ema. I do not see any reason to stretch this farther, because you are then trading through heavy support and hoping for a breakout.
1W - The weekly chart is clearly sitting at a key S/R level. On this timeframe the level is adjusted slightly to be more relevant at 1.00000. In addition to being a historical level, this is also a round number which acts as a psychological barrier as well.
1D - Price action is in a bullish trend, but late last week we closed with a bearish engulfing candle off of key resistance. Based on the price action of all the timeframes together, we may see a move down to either the daily 50 or even the weekly 50 ema over the next couple weeks.
*DXY conern: the DXY has had some bullish pressure coming in which is also a concern. I do see a possible pullback coming but it may be short lived which could have an impact on how USDCHF moves. I will be keeping a close eye on the status of the USD to make sure it is not going to be powering up while trying to short USDCHF.
Summary: Due to the fact that there is no daily trend change confirmation to the downside and not a very strong weekly reversal candle, I would be cautious trying to push this trade past any daily S/R. If an intraday entry is presented, my trade plan would be to see how price action reacts to the next daily level at 0.99800, where the daily 20 is likely to be as well. If there is an intraday trend change back to the upside here, then I would look to take my profit and run due to the concerns outlined above. If there is no intraday trend change and the intraday charts trend to the downside, then I would look to push this to the daily 50 ema. I do not see any reason to stretch this farther, because you are then trading through heavy support and hoping for a breakout.
Note
No entry was provided off of 1.00300 due to a large spike on market open after the weekend. It was caused by Brexit news related to the CHF. Price continued up to the next daily resistance level at 1.00900, but my overall bias was still short due to the weekly and monthly. It did end up providing an entry off of that level and a trade was taken for +2.5% profit down to the daily 20 ema.
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