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AUD/CHF has been moving higher nicely after finding strong support around .7800 this year. After a small pullback and bounce, it might be time for the pair to make a new leg higher.

AUD/CHF 4 Hour Forex Chart
AUD/CHF 4 Hour Forex Chart

As mentioned in the four hour chart above, AUD/CHF fell after last week’s RBA meeting minutes that cited a few factors that could potentially be a problem for Aussie strength. It looks like forex traders have shaken this off pretty well, mostly on speculation that the SNB may act to lift the EUR/CHF floor if the ECB does cut interest rates next week.

The pair is back to retesting–and possibly breaking–previously strong resistance at .8300.  Of course, I won’t know for sure if it will break until the market steadily stays above .8300, but with risk sentiment shifting back to risk-on, it’s worth it for me to take a nibble, especially with the positive interest rate differential.  For now, I’ve set orders to go long at the major psychological level, with a wide weekly ATR stop and my target at the next major area of interest on the higher time frames.  Here’s what I am doing:

Long half position at .8300, stop at .8140, adjustment target at .8500

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t follow what I do. Risk Disclosure.

I’m only risking 0.50% for now and this initial trade structure gives me a 1.2:1 potential return-on-risk, but most likely, .8500 is the level where I’d adjust to lock in profits and scale in to maximize profits if it gets up there.  If I don’t get my entry at .8300, then I’ll probably enter manually, but for now, I’ll let my orders work.

Also, I decided to close my short orders on EUR/JPY at 140.00 as the pair has moved lower from there quite a bit.  I’m still watching this pair, but for now it’s a no touch for me as I don’t think there’s much move this pair can move close to ECB monetary policy meeting next week.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.