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Forex: Ideas You Can Trade - USDCHF Holding Above Par For Fourth Day

Posted by Steven Hatzakis on Jan 7, 2015 1:04:00 PM

USDCHF: Support Building above 1.00 CHF To the US Dollar, and Nearing Long Term Bearish Resistance Line

The medium term daily candle chart below shows the price history of United States Dollar (USD) versus the Swiss Franc (CHF). This currency pair is known as USDCHF, and is trading near 1.0147 around time of publication today.

Last month when this pair was last reviewed in Ideas You Can Trade, a bullish support line was reached during a pullback after .9900 was missed. Since then the bullish trend resumed and after weakening above par against the US Dollar, the pair has held above 1.0000 (Parity) for the fourth consecutive trading day. 

Last time Parity in this pair was reached was in early September 2010, and with the amount of bullish momentum the USD has overall, a bullish trajectory may continue. From a longer term view a bearish resistance line is near current levels and could act to deter the uptrend and even reverse it. Whereas a break above that line would be a bullish signal.

While the trend can be a friend -it can also be a foe - if it changes, therefore, while the USDCHF still looks bullish, and even more so above 1.0000 - any correction in the greenback under parity would be a bearish signal.

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

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.0203 with a Limit to take profit @ 1.0255 and a stop-loss @ 1.0159  Risk/Reward Summary: Limit risk = +52 pips profit / (-44) Stop-loss risk = Gain to Loss ratio =  1.18

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ .9979 with a Limit to take profit @ .9788  and a stop-loss @ 1.0059  Risk/Reward Summary: Limit risk = +191 pips profit / (-80) Stop-loss risk = Gain to Loss Ratio = 2.38

Medium term daily candle chart:

USDCHFDaily January 7 2015 note


Longer term weekly candle chart:

USDCHFWeekly January 7 2015 note


Topics: USDCHF, Switzerland, $CHF, forex trading, US Dollar, technical analysis, USD, Dollar Swiss


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