Pick of the Day: USD/CHF – Stopped Out

Stopped out: 2007-03-30 10:15

It looks like fundamentals beat out technicals in our trade today as the bullish dollar sentiment pushed USD/CHF higher and higher through our resistance levels. With consumer data all stronger than expected as well as a strong Chicago PMI number out this morning, we should see the dollar trend higher into the weekend.

So, we took a minor hit today of -30 pips.

One more time: 2007-03-28 23:59

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Our short trade in USD/CHF never triggered today as the pair rose as high as 1.2190 before turning lower. I still see the pair going all the way to 1.2105, and I think we should continue to try to jump in short this pair.

I have another chart for a different view on the pair. As you can see, USD/CHF has been trading lower in a channel and it has found resistance at the 78% Fibonacci line drawn. Stochastics are currently indicating an overbought condition on the 4hr chart and we can see that the pair has already drifted lower from 1.2180. We will jump in short at 1.2180 if the pair treads back up to that level.

We do have event risk tomorrow with core Personal Consumption Expenditures report later at 8:30 am EST. This is the preferred measure of inflation by the Fed, so it will be closely watched. Please be cautious during that event. We will also see Chicago PMI at 9:45 am EST and a revision of the Consumer Sentiment report at 10:00 am EST. So, a lot of data to be prepared for… please be cautious!

Short USD/CHF at 1.2180, stop at 1.2210, pt1 at 1.2150, pt2 at 1.2130

Please remember to never risk more that 1% of your account on any single trade, so please adjust your position sizes accordingly.

Good luck and good trading!

Trade Idea: 2007-03-28 23:59

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With little news out for the Greenback or Swissy in the upcoming Euro trading session, I will look for a resistance play to go short on USD. With recent US data coming out weaker than expected, there is a short bias on the dollar.

On the chart, I drew a Fibonacci retracement from the previous high to the swing low and it looks like the pair is trading right below the 61% level. Stochastics are approaching overbought level, so we might see a push to the 76% Fib level, which happens to be near the 1.2200 level, before a turn around.

We do have event risk later, with the second revision to the fourth quarter US GDP number. Economists are expecting much change to that, but we will keep an eye on it just in case.

Short USD/CHF at 1.2200, stop at 1.2240, pt1 at 1.2170, pt2 at 1.2140

Please remember to never risk more that 1% of your account on any single trade, so please adjust your position sizes accordingly.

Good luck and good trading!