Trading USD/CHF’s Rising Channel Bounce

I spotted another USD/CHF trade!

I know I should also give other major pairs a chance but I couldn’t help but take this sweet setup on USD/CHF. The pair is currently finding support at the .8820 area, which is near a 200 SMA test, previous support and resistance area, AND rising channel support trend line. On top of that, Stochastic is also in the oversold territory!

USD/CHF 1-Hour Forex Chart

USD/CHF 1-Hour Forex Chart

On the fundamental side I noticed that risk aversion from Australia and China’s data misses continued to dictate market sentiment. And with the SNB saying that the franc is more overvalued in March than in February and Uncle Sam mostly printing better-than-expected reports, I think the Greenback could see more gains compared to other low-yielding currencies.

I’ve been eyeing this setup since the London session but I decided to wait for today’s manufacturing and new home sales reports. I bought at market when the news candle closed as a doji despite weak reports from the U.S. Guess risk aversion is still the name of the game!

I’m using the 1-hour chart on this quick trade so I only risked 0.25% of my account. Right now I have a stop loss 30 pips away (at .8790) and a 60-pip profit target (at .8880) for a 2:1 trade.

Hope this works out!

XOXO,

Huck

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  • ForExchange

    Hi Huck,

    Can you please help me to decide which time frames do you use to enter such a trade? I liked a lot your setup, but then I checked it on the 4 hour timeframe, I was not so sure anymore and on a daily basis it is again the trend. Do you use the same time frames or smaller ones to make a trade like this?

    I wish you good luck!

    • Hucklekiwi Pip

      The time frames I use usually dictate how long I hold on to my trades.

      Since I’m using the 1-hour time frame for this setup I’m only planning to hold on to it for a couple of trading sessions.

      I’m also looking at a short USDCHF if price reaches the 100 SMA again on the daily time frame. That position I’ll probably hold on for a couple of days. Hope this helps! 🙂