With the dollar on the back foot after the Fed’s new inflation policy as well as money being pumped into safe havens let us look at the safe haven pair USDCHF below.
Starting on the daily time frame above we can see that the overall structure of this pair is bearish. We can see that it has been successfully making lower highs and lower lows except for the most recent price action where price looks to be printing a double bottom with 0.9350 proving to offer support. Looking at the trend line drawn, we could see a potential push up to 0.90970 for the fourth touch of the trend line which lines up perfectly with the 78.6.
Dropping down to the 4 hour chart, we can see that there was a candle closure below 0.9350 shown by the upward pointing arrow but the next two candles has brought price straight back above that region which will be an important area to break for the downtrend to continue. Looking at the fib drawn on this time frame, we can see that the 61.8 lines up with previous support which could provide resistance, but for a better risk to reward ratio waiting for a drive further into the 78.6 would be best.
On the hourly chart we can see that when price pulled below the level of support we formed a higher low shown by the upward pointing arrow. We can see that a descending trend line which there has already been 3 touches off of has been broken to the upside suggesting that we could see price push higher before continuing the trend to the downside.
Remember to practice safe money management and always stick to your trading plan. Hit the subscribe button to receive blog posts sent directly to your e-mail.