Last Thursday’s signals were not triggered, as there was no sufficiently bearish price action at either 1.0058 or 1.0110.

Today’s USD/CHF Signals

Risk 0.75%.

Trades must be entered between 8am and 5pm London time today only.

Short Trades

  • Go short following a bearish price action reversal upon the next touch of 1.0058 or 1.0110.

  • Place the stop loss 1 pip above the local swing high.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

Long Trades

  • Long entry following a bullish price action reversal upon the next touch of 1.0025 or 0.9965.

  • Place the stop loss 1 pip below the local swing low.

  • Adjust the stop loss to break even once the trade is 20 pips in profit.

  • Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

USD/CHF Analysis

I wrote last Thursday that if the price could trade for a couple of hours above 1.0058 it would still be a good bullish sign. Overall, I felt more comfortable taking long trades in this pair than short trades. This was a good call as the price continued to rise beyond 1.0058 that day until it peaked at 1.0124, a long-term high price. However, the Dollar then sold off at the end of the week, leaving the price here significantly lower, with a short-term bearish trend, and resistance levels re-established in the 1.0100 area.

This pair is usually extremely mean-reverting, which suggests that as we are at an area of long-term resistance at a price extreme, short trades are going to become interesting if you have the patience to hold tight while the price takes its time moving down.

A break below 1.0058 would be a bearish sign so that is quite likely to be today’s pivotal level. I have no directional bias today on this pair.

USDCHF

There is nothing of high importance due today concerning the CHF. Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time followed at 1:00am by a minor speech from the Chair of the Federal Reserve.

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