Tagged "USD/CHF"

7-29-08

1:43a GMT – The USD/CHF has formed a double-top formation on the 4H and 60M charts (easier to see on the 4H below) with 1.0400 capping possible gains. The double-top formation indicates further losses below the “neckline”.

Trading Idea: Aggressive traders may enter short below 1.0310 whereas more conservative traders might wait until at least 1.0295 to confirm the signal. Short targets at 1.0270, 1.0215 and 1.0160. If top is broken look for more gains and a retest of 1.0435.

(click to enlarge)

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6-27-08

5:50a GMT – USD/CHF gave a strong bullish reversal doji candlestick on the 4H charts last period indicating a possible reversal in the USD decline. The signal comes after a 200 pip decline over the day and near support at 1.0225.

Trading Idea: To confirm the trade the next candlestick (ending at 08:00a GMT) needs to close above the previous candlesticks high at 1.0260. More aggressive traders could enter long now but I prefer to wait until the following candlestick confirms the direction change. Look for long targets at 1.0320, 1.0350, and 1.0395.

Stops should be placed below the bottom doji wick (currently at 1.0218) with a little room to breath. Risk is about 40-50 pips with a reward of almost 180 pips.

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6-18-08

17:29 GMT – USD/CHF has been bouncing off support currently around 1.0370 for days now and I am looking for another bounce around this area. Ultimately the pair is short term bullish unless it closes below 1.0300, the next strong support.

Trading Idea: Look for a bullish reversal candlestick to confirm the long trade with targets at 1.0400, 1.0450 and 1.0495. If 1.0370 is broken look for a test of 1.0350 and 1.0300.

UPDATE – Pair did rise over 150 pips in my support area (see chart below). I did not enter any trade, unfortunately, because I did not see a clear bullish reversal candlestick on either the 1H or 4H charts. You gotta follow the system even if it means missing on on trades like this!

Result: +150 pips

Piphut: No trade

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6-9-08

01:06 GMT – Part of being a successful trader is looking not only your own “comfort” chart time but also looking at the bigger picture as well. This week I chose to post my weekly chart analysis for EUR/USD, GBP/USD, USD/CHF and USD/JPY. I do the analysis on all the pairs I trade, and recommend you do the same for the “big picture” but don’t have time to post them all.

Want to see a different pair next week? Post your comments below!

EUR/USD: As you can see on the chart below the EUR/USD is still firmly in an uptrend unless a clean break of 1.5284 is made. EMA20 (green line) has been acting as good support for the pair since early 2007 and last week showed us a strong bounce of this support. A close this week above 1.58 would confirm the resumption of the uptrend and is likely. The last time the weekly charts looked as they do now was in late 2007 when the pair was in a 1.43-1.50 range, which ended up breaking to the upside off a bounce of the EMA20 and challenging 1.60. Look for a similar result in the coming weeks with a challenge of 1.70.

USD/JPY: I believe that since 6/07 the UJ pair has been in a good Elliot Wave model drop with the rally below 100 the last hoorah of the 5th leg. Whether we are in the 1st leg or the 3rd leg of the retracement is a matter of debate (what’s not in Forex? ;). Last week’s candlestick was bearish but did make a new high and showed decent buying pressure. I don’t believe the doji means much considering the pair has been in choppy trading for the past several weeks. I expect to see more gains this coming week, but this next week will help to show the direction of the pair. Also the RSI closed above 50 for the first time in almost a year. A concern is definitely the EMA30 which has provided resistance for the pair in the past and also the resistance at 106.35 (former weekly support). A close above 106.50 would clear the way for the EMA50 currently around 108.

The exponential moving averages are still aligned in a downtrend though the EMA10 has flipped up and if the retracement continues will soon cross the EMA20.

USD/CHF: Pair remains locked in a clear downtrend, is getting pushed down by the EMA20 resistance (solid resistance since 7/07) and its RSI has just bounced off of 50 to the downside after posting a bearish hidden divergence a few weeks back. Selling near the EMA20 looks like the best strategy though last week’s candlestick was a bearish engulfing so we may or may not get another opportunity on the weekly chart for awhile.

Major concern is that the pair is in the 2nd retracement leg of a 5-3 Elliot Wave model retracement (since the possible 5 wave drop beginning 7/07), meaning a third retracement to the 1.0750 area could occur before more losses.

GBP/USD: The GU pair continues in its bearish channel since the trend reversal on 11/07. Two weeks ago we had a bearish doji that was NOT confirmed by a bearish close under the previous candlestick. Instead we saw a wave of buying at the end of the week courtesy of the ECB comments about the Euro rate increase. Until we see a close above 2.02, though, the pair remains bearish. From the weekly chart below we can see the best strategy for the week will probably be to sell of channel tops.

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6-2-08

0:58a GMT – USD/CHF has a good trend support line from 5/27 and 5/28 lows on the 60M charts. A divergence on the RSI also indicated more USD gains against the CHF. Ultimately uptrend is intact as long as 1.0350 is not broken.

Trading Idea: Look for a dip to support levels at trend support in green (currently 1.037) or 1.035 support and enter long on bullish candlestick. Targets at 1.0410 and 1.0460 with 1.0550 in sight. If support is broke look for further downside at 1.0330 and 1.0280.

UPDATE – 6-2-08, 16:35p, USD/CHF charged through support levels with no candlestick entry to confirm trade. Good no trade.

Result: 0 pips

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7:46a GMT – USD/CHF is dropping rapidly to the rising trendline support now at 1.0420. The RSI hourlies show the same picture with the RSI dropping to multi-day support.

Trading Idea: look for candlestick entry and then buy above support with stop below support. First target around 1.0450 and second around 1.049.

UPDATE – 21:44 GMT – no bullish candlestick every confirmed the bounce and the pair charged through support. One candle almost gave us a bullish engulfing but ended up dropping 60 pips in the same hour to produce a very bearish long wick on the chart. Good no trade or a breakout trade to the downside.

Buy – 1.05675

Stop – 1.05425 (raise to break even on L1)

L1 – 1.05925

L2 – 1.06100

UC – Breakout entry placed above 1.065 resistance. Positives include wicks that have been horizontal in their display of resistance, RSI shows a definite uptrend. Price action is an up channel / uptrend. Low volatility allows for a tight 25 pip stop which is still below large round # of 1.050. Resistance was tested about 12 hours ago and held strongly, but bears were not able to lower the price much.

Negatives include an RSI that is near 70 and would surely break 70 if the pair rises. Also that the pair has shown that the bears were able to fight it down to the bottom of the flagpole previously.

UPDATE: 7:56a GMT 5-15-08. Trade has been close for a 25 pip profit. First target was reached. Stop on second lot was raised to break even and then tripped on.