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Forex: Ideas You Can Trade - USDCHF bullish channel regained

Posted by Steven Hatzakis on Aug 15, 2013 11:15:00 AM

USDCHF:  Bullish channel regained after bounce on long term support line                                  

The medium term chart below shows the USDCHF pair following up a steep short term bullish support line (point 2) after finding support last week on a long term bullish line (point 7) and trading near .9343 (as of publication). The pair has since regained a long term bullish channel (point 4) and nearing a theoretical equidistant short-term bearish resistance line (point 1) which could provide a reversal down a steep bearish line (point 5) if validated. Alternatively, if the current trend line (point 2) and the support line of the long term bullish channel (point 4) fails, then a reversal  – also down a steep bearish line (such as point 5) could developed  - with a target of the long term bullish support line (point 7).

However, since the long term bullish channel (point 4) has been regained and the current short term momentum looks bullish, a continuation up the existing short term steep bullish line (point 2) seems more likely (especially if point 1 is overcome). The medium term trend still remains choppy as discussed in a previous article on the pair in the beginning of August 2013.  

Below are examples of how to trade a bullish continuation or a bearish reversal:


1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ .9425   with a Limit to take profit @ .9482  and a stop-loss @ .9381  Risk/Reward Summary: Limit risk = +57   pips profit / (-44 ) Stop-loss risk = Gain to Loss ratio =  1.30

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ .9299  with a Limit to take profit @  .9231 and a stop-loss @ .9344   Risk/Reward Summary:   Limit risk = +68  pips profit / (-45 ) Stop-loss risk = Gain to Loss Ratio = 1.51

Medium term daily candle chart: 

usdchfdaily august 15 2013 note

 

 

 

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