USD/CHF Price Analysis: Long opportunity to 38.2% weekly Fib target


  • The stars have aligned for a long entry for USD/CHF.
  • The price has rallied from a bearish environment into a bullish environment on the daily and 4 HR time frames. 
  • A restest of 4HR structure and buy limit opens the prospects of a 1:4 risk to reward swing trade set-up.

While the broader sentiment towards the greenback remains weak, the market will be conscious of the short dollar positioning which is starting to get stretched.

In the latest positioning data, JPY and CHF saw net selling overall and investors trimmed their bets on the euro after it hit the highest level in two years. This could be the beginning of a shift in positioning, supportive of the upside in USD/CHF.

Meanwhile, the technical picture has aligned across time frames and offers a potential long opportunity as follows:

Daily accumulation in play

Weekly target

4HR entry signalled

On the 4HR time frame, the price has moved back above the trendline and not only that, it has held on a retest of support, crossed above the 21-hour moving average and has also penetrated the neckline of prior structure.

The combining factors of the weekly, daily and 4HR all aligning for a bullish outlook gives rise for entry at this juncture, targeting the weekly structure for a 1:4 R:R.

Failure of a break to the upside, stop should be moved to entry for a breakeven trade if entry is retested as resistance.

Update

Unfortunately, the market failed to run higher and the trade was a breakeven on a retest of entry acting as resistance. 

 

 

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