While EUR/USD is still busy lollygagging on a tight range, I’ve decided to day trade USD/CHF’s downtrend
Throughout the week the dollar has had trouble making any real gains against its counterparts. For one thing, Uncle Sam’s major economic reports are supporting the Fed’s decision to delay raising its interest rates. Not only that, but geopolitical conflicts, one of the dollar’s biggest boosters a few weeks ago, has also somewhat eased.
This is probably why USD/CHF has been on a steady downtrend since hitting the .9100 psychological resistance early in the week. In fact, the pair is currently hitting a resistance a the .9070 area near a previous support, falling channel resistance, and 100 and 200 SMA lines on the 1-hour time frame. Not only that, but there’s also a bearish divergence on the chart!
I decided to short the pair at market (.9064) and place a tight 25-pip stop. That should put my SL above the channels and the SMAs. I only risked 0.25% of my account because there’s a chance that the dollar would end the week strong, especially since the US is scheduled to print a couple of tier 2 reports today.
What do you think of this setup?