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I got my eyes on USD/CHF! Let’s see if I can pull off a back-to-back win with this pair. Here’s my setup!

On the technical front, I’m waiting for a possible retracement to the .9100 major psychological area. You see, the level also lines up nicely with a previous resistance and a 50% Fib and 100 SMA support on the 4-hour time frame.

USD/CHF 4-Hour Forex Chart
USD/CHF 4-Hour Forex Chart

On the fundamental side, I’m banking on possible end-of-month profit-taking on long dollar trades. The weaker-than-expected personal spending and personal income numbers today probably wouldn’t hurt my retracement idea either.

Overall though, I’m still bullish on the dollar. For one thing, the strong US economic reports released this week support the Fed’s decision to taper its asset purchases and eventually hike rates. By contrast, the SNB is likely gearing up for another intervention as the closely-watched EUR/CHF approaches the central bank’s 1.2000 limit.

If EUR/CHF drops further (it’s only 60 pips away!), it’s reasonable to expect some traders’ price in currency intervention. This could push CHF’s counterparts across the board.

Since this is a swing trade, I’m planning on waiting for the price to reach the .9100 area and show a couple of bullish candlesticks before I pull the trigger. But if the dollar proves to be too strong for a retracement, then I’ll also consider a market entry above the .9200 psychological level.

What do you think? Is this a trade you would take?



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