Watching the USD/CHF Sink. Here's where I'll short a near-term bounce.
The downtrend on the 30 and 60-minute swissy (I prefer the clarity of the 60-minute market trend) is still intact and as we all watch this pair sink below parity, I think many of us are thinking we'd like to short a bounce. But a bounce to where?
On the 60-minute chart my 34EMA Wave shows that the zone in which I would like to short a bounce is waiting between 1.0004 and 1.0030. This is a wide range however the major psychological level could have selling pressure parked between 0.9995 and 1.0005 so it's an important area to watch. If buyers can rally higher through 1.0000 then that opens the door to the 1.0020 (minor psychological level) and 1.0030. In fact I would not be opposed to shorting from 1.0050 which is not only a major psychological level but also where today's exhaustion began the sharp decline...there will be near-term selling pressure waiting there again unless there is a a shift in the fundamental sentiment. (e.g. SNB action, sudden U.S. Dollar strength)
Chart courtesy of Autochartist.
I will maintain this short-term intraday bearish sentiment as long as the momentum remains bearish and organized enough to maintain the downtrend. If prices begin to find buying support above 1.0030 and especially 1.0050, I will re-think my strategy...as that would be my "point of validity" (the point at which I think an trade is no longer valid) for the short entry.
Related Posts:
- Watching the USD/CHF SInk. Here's where I'll short a near-term bounce. 20:02 14 September 2010
- USD/CHF: Following Up on Selling into the Ceiling 13:23 24 August 2010
- EUR/USD 30 and 60-minute Swing Set ups 10:04 16 April 2010
- USD/JPY Mark Down Set Ups to Consider 09:16 24 November 2009
- What does the dollar's correction mean to the longer-term fx trends? 14:54 14 February 2011
Archived Comments (3)
Forex Blog: Chartology
everyone sees things differently. I bought it at .0995 and exited at 1.0041
Thanks for your comment. I don't necessarily disagree. The time frame in the update was a 60-min which since it is in a downtrend, sets ups a retracement/corrective short for me. However in the meanwhile, it does set up a "one thing leads to another" swing buy on the 15-min. This rally is of course trade-able but also necessary for prices to get to where I believe that the USD/CHF could exhaust.
The support floor shown on the chart is less about buying for me and more about where a bounce could occur, setting up a rally.
The 15-min chart has had a nice series of swing buys along the 34EMA Wave since the USD/CHF broke back above parity.
yep, that was a bit of a counter trend trade, This rally is close to where I would look for shorting.