We have a lot of reports due this NFP week so I decided it’s probably better to put on shorter-term trades than to commit to a trade bias.
This time I’m looking at a possible short on USD/CHF. The pair is right at the 61.8% Fib on the 1-hour chart, which had served as a pretty strong support level last month. Not only that, but the area also coincides with a retest of a falling trend line on the 4-hour chart and is also near where the 100 and 200 SMAs are. Last but not the least, there’s a possible bearish divergence on the chart.
On the fundamentals side I’m looking for a continuation of yesterday’s risk-friendly action. This could further weigh on the dollar and drag USD/CHF down. And then there’s the ADP and ISM non-manufacturing reports due at 1:30 pm GMT and 3:00 pm GMT respectively. Both reports are a bit lower than their readings last month.
For the reasons above I decided to risk 0.50% and short the pair at market (.8873). I placed my stop loss 50 pips away and my profit target around last week’s lows.
What do you think of this setup? Is this something you would take?