The Weekly Update: Multiple Entries in the Swiss Franc

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CHF Technical Analysis

Many currency pairs are testing resistance/support levels following last week’s volatility in the Foreign Exchange (Forex) market. We are unable to determine whether these critical resistance/support levels will be breached by the market or contain the current uptrend/downtrend. An additional week is required to shed more clarity on the technical developments that are taking place at the time of this writing.

We have however noted a possible entry in USDCHF and CADCHF. We suspect this may be as a result of a weak Swiss Franc (CHF) rather than a strong USD or CAD but we highlight it is our preliminary analysis.

USDCHF Daily Chart

Please click on the chart to enlarge:

USDCHF Daily Chart 03/04/16

USDCHF Daily Chart 03/04/16

USDCHF Trading Strategy

USDCHF has successfully tested the lower support several occasions where the 500 Moving Average (MA, in pink) is nearby for additional support. Technical indicators suggest the price is in oversold territory, which is an early signal of a possible reversal. Positive divergence is limited to the Stochastic Slow at the time of this writing. The resistance levels that are highlighted in USDCHF daily chart are the regions we must pay close attention to. A firm break above 0.9797 may pave the way for stronger gains in the currency pair. The optimal scenario would be a bearish gap at the opening of the markets that would test the 500MA that would also reduce the required protective stop for the long trade.

CADCHF Daily Chart

Please click on the chart to enlarge:

CADCHF Daily Chart 03/04/16

CADCHF Daily Chart 03/04/16

CADCHF Trading Strategy

CADCHF affirmed the reversed Head-And-Shoulders (H&S) after breaking above the neckline (0.7325) on 26 February, 2016. The target of the reversed H&S was not acquired and the price has re-tested the breached neckline, currently acting as the nearest support. The sideways activity has forced the 100MA (in brown) and the 200MA (in purple) to align close to each other, leaving room for the 55MA (in blue) to paint a golden cross.

Due to the relatively tight stops we may have the ability to enter both trades after the opening of the Forex market. If USDCHF and CADCHF gap higher we may opt for only one currency pair as the required stops’ size will increase following a bullish gap.

USDCHF Trade Alert

Please click on the chart to enlarge:

USDCHF Daily Chart II 03/04/16

USDCHF Daily Chart II 03/04/16

USDCHF long at market price (0.9584)
Take profit: 0.9890
Protective stop: 0.9486
Risk Ratio (RR): 1 : 3 (approx.)
Estimated duration: 14 days

CADCHF Trade Alert

We are adding CADCHF to our current long USDCHF, thus increasing our short net exposure to the Swiss Franc.

Please click on the chart to enlarge:

CADCHF_Daily_Chart_II_3_April_2016

CADCHF long at market price (0.7343)
Take profit: 0.7695
Protective stop: 0.7262
Risk Ratio (RR): 1 : 4 (approx.)
Estimated duration: 14 days

05/04/16 UPDATE: CADCHF triggered the protective stop loss order, ending the trade with a loss. It appears that at the time of this writing it is the US Dollar (USD) that is dominating the market as USDCHF was unfazed by CHF gains against a basket of currencies.

(added on 13/04/16) We were rather unfortunate with CADCHF as upon triggering our stop by several pips the price reversed higher as anticipated.

Please click on the chart to enlarge:

CADCHF Daily Chart 13/04/16

CADCHF Daily Chart 13/04/16

12/04/16 UPDATE: USDCHF is trading at 0.9551 at the time of this writing. We are closing 10% of the long trade at market price with a minor loss. We may increase the partials’ realization based on USDCHF progress. For the time being we settle for 10%.

13/04/16 UPDATE: USDCHF is trading at 0.9624 at the time of this writing.

Please click on the chart to enlarge:

USDCHF_Daily_Chart_13_April_2016

We are closing 20% of the long trade at market price.

13/04/16 UPDATE: USDCHF is trading at 0.9670 at the time of this writing.

Please click on the chart to enlarge:

USDCHF Daily Chart II 13/04/16

USDCHF Daily Chart II 13/04/16

As the price is still near the resistance we are closing 30% of the long trade and shift the protective stop to the entry. It is a very aggressive move, we have little choice.

14/04/16 UPDATE: USDCHF is trading at 0.9666 at the time of this writing. This is a tough decision to make but we have decided to exit the trade as the daily resistance is holding and the possibility for a retracement is now higher.

It is a tough decision to make but we have little say in the matter. We have nevertheless finished the trade with a decent profit.

The Weekly Update: Multiple Entries in the Swiss Franc

As USDCHF long trade is closed this page can now be accessed by all traders. Open trades are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.
The Weekly Update: Multiple Entries in the Swiss Franc

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The Weekly Update: Multiple Entries in the Swiss Franc

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The Weekly Update: Multiple Entries in the Swiss Franc

Last Updated on April 14, 2016