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Forex: Ideas You Can Trade - USDCHF Support on .8800 Faltered

Posted by Steven Hatzakis on Mar 7, 2014 5:02:00 PM

USDCHF: Support Target Reached as Pair Enters Bearish Territory Below .8800

The medium term daily candle chart below shows the price history of United States Dollars (USD) against the Swiss Franc (CHF), known as the USDCHF pair, and having last traded at .8774 today, as the trading week concluded.

Last time USDCHF was covered in the Ideas You Can Trade series a bearish continuation was expected with .8850 and .8800 mentioned as potential support targets. In the last 7 trading days including Sunday, these levels were reached and USDCHF has failed to hold above .8800 in today's trading session.

This indicates the pair has entered very bearish territory after failing to hold above .8800 as it had dipped below that line briefly before recovering in recent days, and unable to close above it earlier this afternoon in NY. Unless the pair can regain that line, it may be heading closer towards .8600 in the short term. In addition, the support near today's low just off .8750 could act as further support to prevent a bearish continuation, as the pair would be desperately need any support it can find in order to avert a further drop from current levels.

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

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ .8901 with a Limit to take profit @ .8921 and a stop-loss @ .8881 Risk/Reward Summary: Limit risk = +20 pips profit / (-20) Stop-loss risk = Gain to Loss ratio =   1.00

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ .8749 with a Limit to take profit @ .8702 and a stop-loss @ .8789 Risk/Reward Summary: Limit risk = +47 pips profit / (-40) Stop-loss risk = Gain to Loss Ratio =  1.17

Medium term daily candles:

usdchfdaily march 7 2014 note

 

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