Last week I shared with you a long EUR/USD opportunity after the pair looked like it was bouncing from a broken resistance level.
Well, NFP week didn’t exactly turn out well for the setup. Instead of bouncing, weak data from the euro zone and a strong NFP release dragged EUR/USD back to its descending channel.
Thing is, I haven’t lost my dollar-bearish bias just yet.
For one thing, Powell all but confirmed a July rate cut earlier this week! Apparently, cutting rates (amidst “solid” economic prospects) because you’re worried about other economies’ growth is a thing.
Powell, along with other FOMC members, were so convincing in their dovish speeches that markets mostly ignored yesterday’s better-than-expected inflation report.
So, unless there are other catalysts out there that are more dovish than a “sure” rate cut in July and maybe another one before the year ends, I’m betting on more dollar bearishness, at least against the franc.
It’s not even a stretch to imagine further weakness for USD/CHF.As you can see, the pair just got rejected at the ascending trend line that it broke in late June. In fact, it’s now confined by a descending trend line on the daily chart!
I’m considering risking 0.5% of my account on a short at market prices. Then again, it’s probably better to wait for a bit more bearish momentum before I jump in. Maybe after price dips below the .9850 bottom WATR?
Here’s a plan that I’m brewing:
Short 0.50% at .9830, SL just above the trend line (.9950), and initial profit target at .9700.
I might also add to my position and use a trailing stop instead depending on how USD/CHF reacts to possibly making new lows.
What do you think? Are you also watching this pair?
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