Published On: Thu, Mar 9th, 2017

Fibonaccis and breakout targets line up in USDCHF

InstaForex

Day trade

/

Sell

Trade view / Yesterday at 8:22 GMT

Analyst / PIA First

United Kingdom

Instrument:USDCHF

Price target:1.0045

Market price:1.0136

Background


Looking to take a short trade in USDCHF this morning, and here is why: 

Monthly – Nothing to take away from the monthly chart. Holding between two trend lines, with January’s bearish outside month offering a mild negative outlook. 

 Source: Saxo Bank

Weekly – Various formations here, most are conflicting: 

1. Bearish ending wedge pattern (break of 0.9768 and the measured move is 0.9071important)

2. Bullish channel

3. Possible bullish cup and handle 

Source: Saxo Bank

Daily – The reverse trendline resistance keeps holding back the bulls, with traders selling into nearly all of yesterday’s initial rally. Trading has been mixed for 26 days, which is common in corrective formations. The most important long-term factor here is the 261.8% extension level lines up perfectly with the wedge target at 0.9071(from 1.0341-0.9856).

 Source: Saxo Bank

Intraday (eight-hour) – The ending wedge formation and the fact that we rejected a level close to the 61.8% pullback of 1.0158 (from 1.0341-0.9860) keep the bears alive. Trendline support seen at 1.0044 (important for the day trade idea). 

 Source: Saxo Bank

Intraday (30 minutes) – Impulsive selloff from yesterday’s high trade (1.0170). The move higher has been corrective and mild. A mild rally to 1.0143 is likely to post an intraday DeMark exhaustion 13 count. The 261.8% extension is seen at the base of the wedge (1.0045). A move through 1.0120 and the selloff is underway. 

Source: Saxo Bank

Management and risk description


Taking a short trade in USDCHF this morning. Trying also to leave a unit on for the long-term trade.

Parameters

Entry: Sell at 1.0145 and/or a break of 1.0122

Stop: 40 pips combined

Targets: intraday 1.0045, long-term 0.9080

Time horizon: day trade and longer term

— Edited by John Acher

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