On Tuesday, I pointed out a couple of possible scenarios for USD/CHF and it looks like one has triggered. Now I’m looking for an entry opportunity to play my long bias on the pair.
Trade Idea: USD/CHF Upside Breakout
It looks like USD/CHF bulls are definitely back in control with the pair breaking above the lower “highs” scenario I pointed out in my Watchlist post on Tuesday. This is one of the triggers I’ve been looking for to play my long fundamental bias, which was laid out in my original USD/CHF watchlist post, so I won’t repeat that here.
I’m ready to go long, but I’m going to do it conservatively with the upcoming U.S. jobs data coming very, very soon. And I’m being conservative because as my main man Forex Gump pointed out in his NFP Event preview, leading indicators pointed to jobs growth but with a little bit of conflicting signals in the mix; in other words, low probability of a blockbuster positive read.
So, I’ll go long on a pullback to the broken lower “highs” pattern, and my stop will be my usual weekly ATR stop to limit my max risk. My target will be the major resistance area that held as highs in 2015 and 2016 for a very good potential return-on-risk. Here’s what I’m doing:
Long half position at .9880, max stop at 0.9730, max target at 1.0300
I’ll be risking only 0.5% of my account on this position and with this framework, I have a potential max return-on-risk of around 2.8:1! Stay tuned for updates and adjustments, especially if NFP gives us a big surprise…and until then, good luck and good trading!
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