Matt Simpson, CFTe, MSTA
CityIndex
Yesterday's candle produced a potential swing low at the inital retracement target and is building a case for a swing trade long.
The Swissy has finally reverted to the mean and produced a Bullish Engulfing candle (comparing the bodies, not the entire range) at 0.956 support to suggest a swing low has formed.
However there are several levels of resistance around 0.974 which may continue to hold for the foreseeable future whilst the USD Index continues to correct. Therefor to increase the potential reward/risk ratio I would only be looking to enter with a limit order, upon a retracement towards support levels.
0.9620 house the Daily Pivot and also an area that has been both support and resistance, so is an obvious level to consider. However I also find that Daily Pivots in particular are prone to lots of market noise so I have no reservations of entering below this level to increase R:R with a stop well below the 0.9560 support zone.
Initial target is 0.9700 and 0.9704 where I'll include a trailing stop in case we do see an upside breakout to new highs.
A break below 0.956 invalidates the setup where a deeper retracement towards 0.950 can be expected.
CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed
Recommended Content
Editors’ Picks
EUR/USD extends sideways grind below 1.0900
EUR/USD stays in a consolidation phase below 1.0900 following the previous week's rally. In the absence of high-tier data releases, the US Dollar stays resilient against its rivals as investors scrutinize comments from central bank officials.
Gold retreated from record highs, maintains the upward bias
Gold rose sharply at the beginning of the week on escalating geopolitical tensions and touched a new all-time high of $2,450. With market mood improving modestly, XAU/USD erases a majority of its daily gains but manages to hold above $2,400.
GBP/USD holds steady near 1.2700, in an uneventful US session
GBP/USD fluctuates in a narrow channel near 1.2700 on the first trading day of the week. The cautious market stance helps the US Dollar hold its ground while central bank officials fail to trigger some action ahead of this week's key events.
Ripple stays above $0.50 on Monday as firm backs research on blockchain and quantum computing
XRP price holds steady above the $0.50 key support level and edges higher on Monday, trading at 0.5130 and rising 0.70% in the day at the time of writing.
Week ahead: Nvidia results and UK CPI falling back to target
What a week for investors. The Dow Jones reached a record high and closed last week above 40,000, for the first time ever. This is a major bullish signal even though gains for global stocks were fairly modest on Friday, and European stocks closed lower.