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Are the tides changing for USD/CHF? If you’re a dollar bear, then you’re gonna love this setup that suggests the pair is running out of buyers above parity.

As you can see, the pair just broke below what looks like as ascending triangle on the 1-hour time frame. Not only that, but the 100 SMA has also just crossed below the 200 SMA. BFD, since the last time we saw a crossover was before the pair jumped by about 250 pips.

USD/CHF 1-hour Forex Chart
USD/CHF 1-hour Forex Chart

I gotta tell ya, I was actually bullish on the dollar earlier this week. Heck, I even pointed out the ascending triangle in my weekly trading prep!

See, I figured with the GOP gaining momentum on their tax reform plans and the POTUS wheeling and dealing in Asia, we’re bound to get good news that might push the Greenback higher.

But like the new iPhone X owners, my dollar-bullish biases were shattered faster than I can say “parity!”

Turns out, the Senate and the House might have different versions of tax plans, which could throw a curveball on the Republicans’ schedule.

Meanwhile, market players mostly shrugged off Trump’s visits to Asian heads of states and even got a bit wary over Trump’s warnings to North Korea to “not underestimate us. And do not try us.

For now, USD/CHF is finding support at the .9225 area near the weekly bottom ATR. If the dollar continues to feel the jitters of lower bond yields and shaky tax reform schedule, then I might consider shorting at a retracement. Maybe somewhere around parity or the broken trend line?

I’ll also be on the lookout for potential long plays on the dollar. For instance, a bounce from the bWATR area that’s supported by fundamentals could open this chart for a bottom-of-range play instead.

What do you think? Will the dollar bounce back to last week’s highs? Or is it ready for a reversal on the 1-hour time frame?

See also:
My Q4 2016 Forex Trade Review and Reflections
HLHB System’s 2016 Performance Summary

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