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Playing the franc pairs versus the commodity currencies has turned out quite well for me lately so I’m thinking of pressing my advantage this time. In case you missed ’em, make sure you check out my initial trade ideas first.

Short CAD/CHF

I caught a nice Fib channel pullback on this pair just when crude oil prices looked ready for another wave lower, but I decided to close early when I found a neater short setup on AUD/CHF.

Apart from not wanting to have correlated trades or twice the risk on long CHF positions, I was also a bit worried that the oil selloff was losing steam when energy ministers in Saudi Arabia and Russia appeared willing to go for a 9-month extension of the OPEC output deal. To top it off, inventory reports from the API and EIA both showed reductions in supply so I thought that the oil-related Loonie would be due for a bounce.

CAD/CHF 4-hour Forex ChartCAD/CHF 4-hour Forex Chart
CAD/CHF 4-hour Forex Chart

After seeing that the pair continued to slide in the days that followed, you might be wondering if I regret exiting early. Well, a little bit. In hindsight, I probably should’ve just trailed my stop to entry to let me stay in the trade and catch more upside. Here’s what I ended up with:

P/L: +60 pips / +0.13%

Then again, I am pretty happy with locking in whatever profits I had back then, knowing that the fundamental picture looked ready to change. A win is a win, right? Besides, price action could’ve turned out very differently and I would’ve been upset about losing this trade (and my AUD/CHF short!) in that case.

Short AUD/CHF

Now here’s the setup I switched over to from my CAD/CHF short. I hopped in on a pullback after the break of a long-term rising channel support, which lined up nicely with the resistance on a shorter-term falling channel.

The pair sold off sharply when risk aversion extended its stay in the markets on “Trumpgate” and price is now testing the bottom of the latest channel. A bounce is taking place at the moment since Australia just printed stronger than expected employment data.

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

In addition, AUD/CHF is also sitting right on another major support zone around the .7250 handle so there could be some buying interest right here. I’m still on the fence about adding on a break of this floor and aiming for the next support closer to .7100, but I’m also wary of SNB head Jordan’s jawboning remarks yesterday.

For now, I’ve already moved my stop slightly below my .7395 entry to lock in at least 20 pips for a risk-free trade and some change. I’ll keep close tabs on Aussie price action to gauge if bears are likely to keep pressing on or if I should also just lock in my gains then just set a sell stop order to catch any additional downside momentum.

Care to share your thoughts? Don’t forget to check out our risk disclosure!

Cheers,

Happy

See also: Q1 2017 Trading Performance Review

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.