With forex bears setting their sights on the dollar this week, I found a short-term setup that might get us in on USD/CHF’s downtrend. Here ya go!
Unless you’ve been too busy waiting for updates on Lamar Odom, then you should know that the Greenback has been taking hits from forex traders for a while now. You see, Uncle Sam’s top tier reports this week have been mostly disappointing and are supporting speculations that the Fed won’t have enough proof to convince them to raise rates this year.
With GBP/USD’s rising channel and USD/JPY’s triangle all but broken, I’m setting my sights on a potential retracement trade on USD/CHF.
As we can see on the chart below, the pair is finding support at the .9500 major psychological handle. Drawing Fibs on the 1-hour chart brings our focus to the 38.2% – 50.0% Fib levels, which has not only served as an area of interest in the past, but is also where the 100 and 200 SMAs are right now.
A short entry at around .9600 – .9650 could get us sweet pips if we put our stops around 100 pips away and aim for at least the current bottom. Of course, we can always wait for price to hit the levels and then re-evaluate the dollar’s fundamentals before we pull the trigger.
What do you think about this one? Will USD/CHF continue to see losses over the next couple of days?