Dollar selling picked up not too long after going short USD/CHF last week, enough to hit my max target in just a few days. Here’s a quick review.
USD/CHF Fib Short Play
Last week, I decided go short USD/CHF on rising speculation in the Fed futures market that the Federal Reserve may cut interest rates to combat any negative effects the Coronavirus may have on the U.S. economy. It looks like that was the right call as fears intensified as the week went on as the global risk of the Coronavirus went from ‘high’ to ‘very high’ according to the WHO, and as more countries confirmed their first cases of the virus.
The U.S. dollar quickly sold off, especially after the news of the CDC confirming its first US coronavirus case of ‘unknown’ origin and as California monitors over 8,000 potential patients, pushing USD/CHF to hit my target at 0.9650 and closed out my open position for a nice short-term gain:
Total: +105 pips / +0.43% gain on 0.50% max risk
Overall, this was a great trade, although as we can see in the chart above, I probably should have left the trade open to grab more pips. But given that we were testing a major support area and with the weekend approaching, I decided to let my orders take the profit and walk away from the trade for now.
Since then, USD/CHF has broken below the previous swing low area around 0.9600, so I will keep this pair on my watchlist to see if we’ll get a bounce this week back to 0.9600 and if the bears hold it as resistance.
Stay tuned for that potential idea to come, and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
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