Partner Center Find a Broker

Hey, forex friends! If you’re looking to trade the dollar like I am, then you’re gonna love this potential retracement on USD/CHF’s daily time frame.

As you can see, the dollar has come a long way from its 2018 lows against the franc. And why not?

Market players are choosing to go the “I’ll-price-it-in-when-I-see-it” route with Trump and China’s tariff row. Seems like everyone is waiting for the first one to actually implement these plans and proposals before they sell their dollar-denominated assets.

USD/CHF Daily Forex Chart
USD/CHF Daily Forex Chart

Thing is, USD/CHF isn’t exactly out of the woods just yet. Unless Trump gets China on the negotiating table, then we’ll likely see more FUD around the prospect of a trade war.

The falling trend line that has been keeping the bulls in check since October 2016 is still valid, and stochastic is also flashing an overbought signal.

The pair is currently testing the .9650 area, which happens to also line up with a 61.8% Fib retracement and 100 and 200 SMAs on the daily time frame. Oh, and did you notice that the area has served as support and resistance in the past couple of months?

For now I’ll be on the lookout for the earliest signs of bearish momentum. I’m looking to sell around the .9700 – .9800 area depending on how it responds to the falling trend line. I’ll aim for the previous lows and place my stops just above the trend line.

If Trump DOES get China on the bargaining table and Uncle Sam’s twin deficit problems magically disappear and the Fed hints at a fourth rate hike this year, then I’ll consider switching my biases and aim for around the parity area.

How about you? What’s your bias on the dollar?

See also:
My Q4 2017 Forex Trade Review and Reflections
Latest version of the HLHB Trend-Catcher System

Huck's Signature

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.