Daily Price Action
Shares

USDCHF Rolls Over Following Test of Key Resistance

Shares

USDCHF bulls have struggled to close the pair above 0.9800 on a daily closing basis. That’s the level I mentioned on the 28th of September as one that could restrict upside potential.

The 0.9800 price level is just a placeholder. Because we’re dealing with a trend line that extends from the current 2017 high, the actual price is somewhat of a moving target.

On Friday of last week, the USDCHF carved a bearish pin bar from this trend line. I know some of you were anxious to short the pair for a move back toward range support at 0.9435. And that may work out well for you.

However, sellers failed to close Friday’s session back below the 0.9770 horizontal level. That means if you sold the pair anywhere above this level, you were selling into key support which is never a good idea.

Just like the USDJPY that we discussed yesterday, the price action has been relatively stagnant. The trend line from the current 2017 high was attracting sellers near 0.9800/20 while the 0.9770 area was attracting bids.

Since the time I started writing this post, sellers have taken prices well below 0.9770 support. That means today’s close at 5 pm EST become a critical factor in determining the likely path forward.

If sellers secure a close back below horizontal support at 0.9770, we could see the pair slide back toward 0.9435.

On the other hand, a close above trend line resistance near 0.9800/20 would suggest a continuation of the September rally and expose key resistance at 1.0100.

Keep in mind that the USDCHF is coming off of multi-year range support at 0.9435. The level has been instrumental in directing price action since August of 2015. That means any push lower from current prices could encounter significant buying pressure on the way down.

Get Free Forex Trade Setups Delivered To Your Inbox! Click Here To Sign Up

USDCHF trend line resistance and horizontal level

Leave a Comment:

8 comments
Deos says

I think im a mini Justin now ! i did same analysis as you and decide to stay aside from that bearish pin bar, cause the pair seems to be doing the best to come back in the wedge pattern which started in December 2013 and to break the trendline resistance… thanks Justin you the best ! lets wait and see

Reply
    Justin Bennett says

    That’s great to hear, Deos. You’re welcome.

    Reply
Roy Peters says

If price close below support bearish engulfing at swing high at resistance would have me considering a short opportunity.

Reply
Farai says

Thanks Justin. Was considering shorting also. Guess will wait and see the closing price first

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Peter promise Igbokwe says

Tanks Justin ..making me better everyday

Reply
    Justin Bennett says

    Anytime, Peter. Glad to hear that.

    Reply
Raphael Festus says

Justine, love your analysis. It’s been my reference point ever since I discovered you. Great Job. I ok the bears after the close of daily candle yesterday.

Reply
Add Your Reply