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Remember that AUD/CHF long-term rising wedge pattern I was looking at a week ago? Price is already breaking higher so I decided to hop in a small position at market. Take a look!

AUD/CHF Trade Setup

Since price already moved past the rising wedge resistance and the .7700 major psychological level, I decided to go long at market (.7725) and set my stop just below the previous week low and the .7600 mark. This pair ain’t exactly a volatile one since its weekly ATR is below a hundred pips so I think a 150-pip stop beck inside the wedge formation should be enough leeway.

Besides, I’m initially aiming for the .7900 area as my first profit target, although I could adjust this higher and just trail my stop if bullish momentum looks really strong. Zooming out to the weekly time frame reveals that the .7850-.7900 region previously acted as support so I’m thinking a lot of limit orders might be waiting there.

AUD/CHF Daily Forex Chart
AUD/CHF Daily Forex Chart

Even though Switzerland voted against tax reform during the weekend referendum, I’m still seeing a lot of franc weakness across the board due to the shakier outlook for Europe. Greek debt troubles are back in the limelight as the government is encountering some friction with the IMF in terms of securing the next tranche of bailout funds, adding financial uncertainty to the ECB’s list of economic concerns, which might then keep the SNB on intervention watch.

In contrast, the Australian dollar is enjoying strong support after the RBA sounded less dovish in their latest policy statement. Data from China has also been mostly upbeat, signaling potentially strong demand for the Land Down Under’s commodity exports later on. Here’s what I have:

Long AUD/CHF at .7725, stop loss at .7575, initial profit target at .7875 for a 1:1 return-on-risk and ultimate PT at .8175. I’ve risked 0.5% of my account on this position but I’ll be ready to press my advantage when the situation calls for it.

As always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re thinking of taking the same setups.

Q4 2016 Trading Performance Review
Read about my trading framework
Risk Disclosure

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.