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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/Zl7sfu0OT2
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/QqlZ2dQgVv
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/lvIUu5FHoq
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/bpKdIqGxsn
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/jmcAIW4w5k
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/M9isuvnzqF
  • The British Pound is giving back some of its multi-month gains with some pairs testing notable support despite a positive fundamental backdrop. Get your market update from @nickcawley1 here: https://t.co/6Ct5R0H41F https://t.co/c4rXmMjMrv
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5cVYOn https://t.co/4dhCP5pnxM
  • Gold is facing the neckline of a Double Bottom Pattern after bouncing off a confirmed longer-term trendline. Is a bullish reversal in order? Get your market update from @FxWestwater here: https://t.co/kLXZewWBMd https://t.co/w1Nu0z569m
  • Central banks often deem it necessary to intervene in the foreign exchange market to protect the value of their national currency. Learn how central bank intervention can impact your trading here: https://t.co/8G8mUX4so6 https://t.co/Gn41XsGktg
An AUD/CHF Set-up That Most Traders Dream About

An AUD/CHF Set-up That Most Traders Dream About

Kaye Lee, Head Forex Trading Instructor

Talking Points:

  • The Biggest Attraction About AUD/CHF
  • Where the Best Entry Point Will Be
  • A Signal to Help Validate the Entry

In spite of the heightened uncertainty, the market has been generous so far. A recent NZDJPY trade delivered immediately, and even our GBPNZD set-up eventually obliged after a reduced loss on the first attempt. Nonetheless, the large momentum moves from last week continue to cloud the outlook for both bulls and bears alike.

Today, the main pairs of interest include the Swiss franc (CHF), with which we will pair the Australian dollar (AUD) because it allows for a more conservative and potentially safer entry. The trade-offs for that additional safety come in two forms, however: 1) The set-up may not materialize; and 2) Even if it does, it may take a while to work.

Nonetheless, preserving capital sits atop the agenda in adverse market conditions, and as a result, it pays to be picky when selecting trades. The biggest attraction about AUDCHF is the clear downtrend that has formed on the weekly chart below.

Guest Commentary: The “Classic” AUD/CHF Bear Flag

An_AUDCHF_Set-up_That_Most_Traders_Dream_About_body_GuestCommentary_KayeLee_November5A_1.png, An AUD/CHF Set-up That Most Traders Dream About

Chart pattern enthusiasts will recognize the current formation as a classic bear flag with a very long flag pole. Thus, should we be able to catch the end of the flag just before it breaks, it could potentially develop into a wild ride down, which would be a dream scenario for most every trader. That potential alone is reason enough to favor AUDCHF over the others.

The pattern that we hope will develop is shown on the daily chart below. Price has risen for five candles now, although admittedly, one of those is a Sunday candle. Regardless, it seems reasonable to locate an entry level at the end of this upward movement.

Guest Commentary: Rising Wedge on AUD/CHF Daily Chart

An_AUDCHF_Set-up_That_Most_Traders_Dream_About_body_GuestCommentary_KayeLee_November5A_2.png, An AUD/CHF Set-up That Most Traders Dream About

Fighting momentum like this head on is never a good idea, so resistance is borrowed from the top of the wedge. Due to the heavy momentum, a somewhat larger estimate of resistance is called for. In this case, the resistance zone is 0.8715-0.8782, which is the approximate size of the daily average true range (ATR), or 67 pips.

In practice, some slowing of momentum on the four-hour chart prior to hitting the resistance zone would be ideal. However, the trade would be valid regardless of whether or not price got there.

Guest Commentary: An Ideal Momentum Signal to Watch for

An_AUDCHF_Set-up_That_Most_Traders_Dream_About_body_GuestCommentary_KayeLee_November5A_3.png, An AUD/CHF Set-up That Most Traders Dream About

The trigger for this trade would be derived from some kind of reversal pattern on the hourly chart, which usually (but not always) would be a reversal divergence. If the slowing of momentum indicated in the above scenario develops, then the trade can be taken with greater confidence.

In any case, it is still best to divide the trade into longer- and shorter-term components so as to make defensive trading possible. The short-term trade can be removed at the first sign of trouble in order to reduce risk on the trade, leaving the longer-term position in place to catch a large move, should one develop.

By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com

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

DISCLOSURES