If you’ve watched USD/CHF long enough, then you’ll know that for some reason the pair reacts strongly to the .9850 handle. In fact, the level currently represents a range support that hasn’t been broken since September!
What makes the setup interesting today is that stochastic is flashing an “oversold” signal on the 4-hour time frame.
What do you think? Will .9850 hold as support for another day? Buying at a retest of the level would give you a hot reward-to-risk ratio especially if you place your stops just below the level and aim for previous highs closer to parity.
If you’d rather trade a downside breakout, however, then you can also wait for a clear break below .9850 and target previous areas of interest near .9700, .9750, and .9800 instead.
Here’s one for the currency cross traders out there!
EUR/CAD juuust bounced from the 1.4750 psychological handle, which isn’t surprising since the area had just served as resistance in late November.
Are we looking at a range resistance play in the making? Stochastic also just left the overbought territory, so y’all gotta be realistic with your reward-to-risk ratios if you’re planning on jumping on this one.
Shorting at current levels could still make for a good trade especially if EUR/CAD ends up dropping to the 1.4550 range support.
If you’re one of them euro bulls, however, then you can also wait until EUR/CAD breaks above the November highs and shoot for a retest of the 1.4900 previous area of interest instead.