To receive James Stanley’s Analysis directly via email, please sign up here.
Talking Points:
- USD/CHF Technical Strategy: Short, one target remains at .9441.
- If you’re looking for trade ideas, check out our Trading Guides; they’re free.
- SSI remains stretched in Swissy by a tune of >+3-to-1 and this is bearish. Click here to learn more about SSI.
In our last article, we took a cautious look at USD/CHF. The primary point of emphasis for the lack of a clear setup in the previous article was the persistent support that had set in off of the .9550 Fibonacci level, which is the 38.2% retracement of the most recent major move (taking the May 2015 low to the November 2015 high). As of our last writing, support had built off of this Fib level for three of the previous four trading days, and after another four days of price action around this level we’ve finally seen a bounce in price that may lead into another short re-entry.
We had also listed the zone from .9660-.9700 as the area of interest for future short positions, and price action has just run into this zone off of this morning’s strength in the pair. There is just one problem: Price hasn’t slowed down. We don’t yet have evidence of resistance as today’s Daily candle is currently showing as a ‘Marubozu.’ A marubozu is a one-candle formation with no wick on the top or bottom that signals a strong, one-directional move, and that’s what today’s daily candle in Swissy is showing. The marubozu indicates extreme strength or extreme weakness, and this is generally something that traders want to avoid ‘fading’ when at all possible.
So, the good news is that a short entry may be nearing ifresistance shows in this area within the next couple of days; but the bad news is that traders likely don’t want to fade a maubozu candle as that signals significant strength. So some patience may be required for that next short entry.
But given the veracity of today’s strength, this can allow us to re-adjust our selling zone to include a major psychological level of .9750. So, should resistance show in the next couple of days between .9660-.9750, traders can look to a price action trigger as short entries can be investigated with the aim of down-trend continuation.
Created with Marketscope/Trading Station II; prepared by James Stanley
--- Written by James Stanley, Analyst for DailyFX.com
To receive James Stanley’s analysis directly via email, please SIGN UP HERE
Contact and follow James on Twitter: @JStanleyFX
