USDCHF: Support Regained near .8750 After Brief Dip to .8697 On Wednesday
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 .8752 around time of publication.
During wednesday's trading session the pair dipped briefly below .8700, which appears to be just off a support line that is parallel to the lower line of the developed bearish channel.
In addition, the brief drop below .8700 indicates the could be a test before a larger drop or that the pair has established support on this level. Since then, the pair has now recovered back to support that was previously around .8750 as covered in the last post in this series.
If 87.00 is breached again, the pair will head lower, if .8750 holds - then support of recent's lows may hold firmly enabling a more medium term bullish recovery in order for the USDCHF pair to avert a further drop.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ .8802 with a Limit to take profit @ .8842 and a stop-loss @ .8762 Risk/Reward Summary: Limit risk = +40 pips profit / (-40) Stop-loss risk = Gain to Loss ratio = 1.00
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ .8696 with a Limit to take profit @ .8669 and a stop-loss @ .8721 Risk/Reward Summary: Limit risk = +27 pips profit / (-25) Stop-loss risk = Gain to Loss Ratio = 1.08
Medium term daily candles: