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Talking Points:

  • USD/CHF Technical Strategy: Short, no targets hit yet. Additional short entry identified.
  • The Macro setup in the pair could point to further losses on the back of continued safe-haven-like flows.
  • If you’re looking for additional trading ideas, check out the DailyFX Top Ideas for 2016.

In our last article, we looked at a short-entry in USD/CHF using the ‘big picture’ Fibonacci retracement level at .9948 for entry. It took a few days for price action to top out, but earlier this morning price action on the hourly chart finally set a new lower-low, indicating that a return of the down-trend may be back. The initial target sits just 9 pips below the current near-term low.

The setup moving forward is to look for more short positions given this recent reemergence of the bearish trend. As always, timing is of the upmost importance, so given that we’ve seen a few hours of support develop here it would behoove the trader to wait for a cleaner setup. That could be had in one of two ways. 1) inside price action – let prices retrace higher to an older point of support, and then look to trigger the short off of that new resistance or 2) outside price action, let new lows come in, and then look to take the short off current support levels.

The area of interest for the first option at this point appears to be in the .9887 vicinity, as this is the 38.2% retracement of the most recent move while also being the last ‘higher swing-low’ before the exhaustion-top had set-in. Traders can wait for price action to show resistance on the hourly or 4-hour chart, and this could provide the short-side trigger. For option two, traders can use this current batch of support on the hourly for that thesis. Let price action break lower, and then look for resistance off of this current vicinity of support at the ~.9850 area.

On the profit target side, the same levels mentioned previously apply. If .9850 is crossed, targets can be cast towards .9749, and then .9660 (the prior swing-low). Below that, traders can target the psychological level at .9500 and then .9441, which is the 38.2% retracement of the ‘big picture’ move, taking the 2005 high to the 2011 low.

USD/CHF Technical Analysis: Staying Short and Looking for More

Created with Marketscope/Trading Station II; prepared by James Stanley

--- Written by James Stanley, Analyst for

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