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USDCHF Breakout in the Horizon as the Pair Trades In a Congested Area

USDCHF Breakout in the Horizon as the Pair Trades In a Congested Area

2011-02-07 16:30:00
Michael Wright, Currency Analyst
Share:

Potential 24 Hour Setups

Currency Pair

Potential Target

Pivot Support

Pivot Resistance

Long USDCHF

0.96

0.9440

0.9693

*Trade updates during the course of the day will be provided through our real time news page.

Review of Price Action on the Previous Day’s Trade

Currency

Entry

Potential Target

Close

Pending Long AUDJPY

--Failed to trigger--

--

--

*Note: EURUSD short is from the last updated report on Thursday

Currency traders may be faced with a breakout in the USDCHF in the short term as the pair managed to work its way into a congested area on the hourly charts. Indeed, price action is trading in a rising 1 hour channel, while upside risks are capped by a 4 hour descending trend line that remained intact since December 2nd. A break and a 4 hour close above 0.96 may validate additional gains towards the 0.97 area, while an hourly close below 0.9550 warrants concern and could lead the pair back towards 0.948. It is worth noting our speculative sentiment index stands at 2.08, providing the contrarian signal to short the USDCHF. All in all, the pair presents a scalping opportunity at the moment; however, traders should caution a breakout in either direction. As price action moves in your favor, make sure to place a trailing stop to avoid any unforeseen losses.

USDCHF 1 Hour Chart

Intraday_Trading_02.07.11_body_usdchf.png, USDCHF Breakout in the Horizon as the Pair Trades In a Congested Area

Charts Created Using FXCM’s Strategy Trader

Close: 0.954

Retail positioning relates to our speculative sentiment index which illustrates where traders are at in the market. The larger the retail positioning is within the highlighted area, the more likely it is that longs exceed shorts or vice versa. We will look to use this indicator in conjunction with other technical developments to dictate price action over the next 24 hours.

Every day at 16:00 GMT, we analyze potential 24 hour trade set ups. The trade is no longer valid if it is not triggered by 16:00 GMT the next day. Good luck trading!

Written by Michael Wright, Currency Analyst

To Receive Future Articles by Email, please contact me at instructor@dailyfx.com

Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, Intraday Trading, and Forex Trading Weekly Forecast

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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