Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
Are Scalpers Ready to Trade the USDCHF?

Are Scalpers Ready to Trade the USDCHF?

Walker England, Forex Trading Instructor


Article Summary: The USDCHF is often overlooked when it comes to scalping. After dropping 258 pips, we will review if current momentum presents fresh day trading opportunities

Scalping strategies normally employ both trend identification and momentum analysis. This step in our trading plan is important but more often than not leads us to focus on more volatile currency pairs. However, this does not always have to be the case. Today for our analysis, we will take a look at a pair that is often passed over when it comes to scalping due to its smaller trading ranges. Today we will be reviewing the USDCHF to see if the market is conducive for new day trading positioning.

Below we can see a 4Hour chart of the USDCHF. Even though this pair is not often associated with large sweeping trends, the USDCHF has dropped over 258 pips from the end of last month’s trading. Traders wanting to use the trend can continue to sell as long as this bias is in place. However, before any new orders are put into play, traders will question if short term pricing is moving in the direction of the trend.

Learn Forex – USDCHF 4HR Trend

(Created using FXCM’s Marketscope 2.0 charts)

USDCHF Building Blocks

After identifying the trend, a scalper’s next step is to identify short term momentum. This step is taken to avoid potential reversals and identify key technical levels for trading. As seen in the graph below, we will be reviewing a 30 minute chart that segments our trading week between Wednesdays and Sundays. Strong momentum will be indicated if we can see a trend continuing for both partitions. So let’s review exactly where momentum is heading for the USDCHF.

To begin our momentum analysis we need to identify a starting point on the graph. Block 1, labeled below, begins on Wednesday the 3rd and runs through Sunday the 7th. During this time frame the USDCHF dropped off its high at .9525 to form a new low at .9318. Block 2 displays a continuation of the downtrend as price proceeds to create a lower low. After our analysis is completed you will notice both blocks have been colored red. This indicates to scalpers that momentum is currently pushing lower in the direction of our primary trend.

Learn Forex – USDCHF Building Blocks

(Created using FXCM’s Marketscope 2.0 charts)

Now that our analysis is completed, we can confirm there is potential to consider scalping the USDCHF. As long as the trend and downward momentum continues, traders will look for new areas to enter in breakout or swing style positions. In the event that price reverses and breaks above the standing Block 2 high at .9356, traders should take this as a signal that the market is at least temporarily reversing. At that point, we can begin our analysis again and look to trade a new currency pair.

---Written by Walker England, Trading Instructor

To contact Walker, email Follow me on Twitter at @WEnglandFX.

To be added to Walker’s e-mail distribution list, CLICK HERE and enter in your email information

Are you looking for a scalping strategy for the FOREX market? Sign up for our free CCI trading course! CCI Training Course

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