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.

Free Trading Guides
EUR/USD
Bullish
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
GBP/USD
Mixed
USD/JPY
Mixed
Gold
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
Bitcoin
Mixed
More View more
Real Time News
  • While Sino-US trade jitters are temporarily abating, China-Swedish trade tensions are rising as a part of a political contagion of growing economic hostilities between nations across the world. Get your market update from @ZabelinDimitri here:https://t.co/F1fVoyzoz5 https://t.co/z49NzgZrXd
  • RT @malkudsi: Natural Gas Eyes Pushing Higher as Support Holds - Nat Gas Technical Analysis More details in the link below: https://t.co/HG…
  • As prices dance around on charts, traders are often looking for reasons to explain price movements; however, the underlying source of price movement boils down to the relationship between supply and demand. Learn more about the forces of S&D on forex here: https://t.co/8LfkLXbj2W https://t.co/swcuwAMGAk
  • How can traders avoid #FOMO in trading? Start by implementing a well-heeled plan taking only four hours per week. Get your insight from @JStanleyFX here: https://t.co/vwUShQPc27 #tradingstyle https://t.co/4adyTWvQ22
  • What are the Market cycles? How are #currencies impacted in these cycles? How can these cycles impact #forextrading patterns? Find out here: https://t.co/ckr2fUOWqW https://t.co/gLJGj1FAOC
  • Central bank independence has several advantages and disadvantages. Find out what they are in-depth with @MartinSEssex here: https://t.co/wVFXbbTxf1 https://t.co/J0MMkVmCUu
  • Get your stock market basics right - what is the stock market and how does stock trading work? Find out here: https://t.co/JfAJLAtlsY https://t.co/ZfPUxHWeiG
  • The Mexican economy contracted for the first time in almost 10 years in 2019, but growth is expected to pick up in 2020 according to its finance minister. Get your $USDMXN market update from @HathornSabin here: https://t.co/gupJdU7WYT https://t.co/mMN8LFb5i5
  • EUR/USD has been weakening since the start of 2020 and the decline has accelerated this month. At some point there will be a correction but further losses are still likely as the year progresses. Get your $EURUSD market update from @MartinSEssex here: https://t.co/ieJUBNeAIf https://t.co/Dw4f7DQocg
  • The $AUD has risen in anticipation of a deal Washington and Beijing. But the Australia-China trade relationship has not suffered much and may even have been helped by China’s spat with the US. Get your market update from @DavidCottleFX here:https://t.co/An7h5X0Zcz https://t.co/Rn7mLbS1EF
USD/CHF Technical Analysis: One’s Trend is Another’s Range

USD/CHF Technical Analysis: One’s Trend is Another’s Range

2016-08-31 18:51:00
James Stanley, Currency Strategist
Share:

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

  • USD/CHF Technical Strategy: Longer-term range, near-term up-trend after Friday’s USD-reversal
  • Swissy has put-in extremely bullish price action as rate hike bets have continued to increase around the Federal Reserve.
  • SSI - If you’re looking for trading ideas, check out our Trading Guides. And if you want something more short-term in nature, check out our SSI indicator.

In our last article, we looked at the recent up-tick in price action in the Swissy with the question of whether we were seeing a bear-flag formation or a legitimate bullish reversal of near-term price action. And last Friday gave us our answer after USD/CHF rallied by more than 160 pips in the five hours after Janet Yellen’s speech at the Jackson Hole Economic Symposium. Chair Yellen and Vice Chairman Stanley Fischer successfully prodded markets towards higher-rate expectations, and this drove the U.S. Dollar higher as rate hike bets for the United States began to increase after months of driving lower.

The Swissy has seen considerable rip since that Friday morning batch of speeches, and price action has only continued in a bullish manner to send USD/CHF to a key area of resistance at .9834. This level was the August ‘swing-high’ in the pair while also being the 23.6% Fibonacci retracement of the May high/low in the pair.

On the chart below, we look at this recent near-parabolic movement in the Swissy as U.S. rate expectations have hustled higher.

USD/CHF Technical Analysis: One’s Trend is Another’s Range

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

While this extremely strong move could be attractive for continuation potential, traders would likely want to scroll back on the chart to see the ‘bigger picture’ range with the twice-tested Fibonacci resistance level at .9948; which is the 61.8% retracement of the 2010 high to the 2011 low in the pair. Since falling into this range in March of this year, much of Swissy’s price action has been confined to this 450-pip range.

This is relevant for two reasons: A) This could cap top-end profit targets for bullish approaches at a meager 100-110 pips, which, while still ‘workable,’ could make for a difficult situation if chasing a near-parabolic move that’s more than 50 pips away from price action support. And B) should this recent bout of USD-strength reverse, this could make for an attractive short-side swing trade within the range if resistance at .9834 holds, enabling traders to lodge stops above .9948 whilst looking for profit targets in the .9550-.9600 vicinity.

So, while this near-term trend has been strong to the up-side, the longer-term range may present more potential to traders, particularly those looking to fade this recent bout of USD-strength.

USD/CHF Technical Analysis: One’s Trend is Another’s Range

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

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

DISCLOSURES

News & Analysis at your fingertips.