Trade Idea: 2011-6-02 1:22
I don’t think the technical setup could be any simpler than this. Looking at the chart, USD/CHF seems to be currently retracing some of its losses, which I see as a chance to ride the trend and sell it at a more expensive price.
After all, I don’t think the market would easily forget yesterday’s weak employment and manufacturing data from the U.S. According to Pip Diddy, the ADP non-farm employment report and the ISM manufacturing PMI hint that the much-awaited NFP report on Friday would also tank. Yikes!
On the other hand, Switzerland‘s retail sales and manufacturing data paint a stark contrast of the economic landscape in the country compared to that of the U.S. From what I’ve heard, both reports topped expectations and consequently got traders flocking in to the franc.
So how am I gonna play this?
Once price reaches the area between the 50% and 61.8% Fibonacci retracement levels, I’m going to wait for candlestick reversal patterns and go short.
If triggered, I’ll ultimately aim for .8400 with my stop above .8500. Hopefully, things go as planned (never happens in the forex market, haha)! I have to gauge whether or not a disappointing NFP figure is already priced in before I pull the trigger. Heck! There are even speculations of an SNB intervention which I also have to watch out for.
But let’s see what happens. Keep your fingers crossed for me, pretty please with candy sprinkles on top?