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I’m back! After days of waiting, I’ve finally found a way to participate in USD/CHF’s downtrend.

A few days ago I told you guys about me wanting to short the dollar against the franc after USD/CHF broke a loooong-term uptrend.

I also don’t think that the dollar’s prospect against the franc will improve anytime soon.

For one thing, the U.S. and China have a long way to go before even hinting at a trade deal. While neither has announced new tariffs on top of the ones that took effect this month and scheduled on December, we have also yet to hear about high level talks that would further the negotiations.

Meanwhile, the Fed is still under pressure to cut their interest rates further. Recent statements suggest that FOMC members aren’t too excited over another rate cut so soon after the last one, but we never know just how compelling Trump’s next tweets will be!

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

On a technical basis, USD/CHF is now near the top of the channel that we’ve been eyeing for weeks. Not only that, but the current price is also near the 100 SMA that has just crossed below the 200 SMA. Last but not the least, USD/CHF’s current levels are near last week’s highs.

I didn’t want to wait around for a better entry closer to the SMAs, so I risked 0.5% of my account at market (.9900). I placed my stop near the top weekly ATR and just above parity (1.0005) and my initial profit target near last week’s lows (.9720).

Here’s the plan:

Short 0.5% at .9900, SL at 1.0005, initial PT at .9720 for a 1.7:1 reward-to-risk ratio.

Of course, I’ll be on my toes watching USD/CHF for catalysts that could invalidate my trade idea. This week’s NFP reports, for example, could restore confidence in Uncle Sam’s prospects long enough to trigger my stops. Even Powell’s speech scheduled on Friday could also provide upside catalyst for the dollar.

What do you think? Are you shorting USD/CHF with me? Or are you taking the opposite side? Maybe I should’ve just stayed away from the pair?

Let me know what you think!

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