The USDCHF can either be the easiest pair to trade, or the most difficult.
It all depends on your timing.
For instance, the selloff between early May and late June was relatively orderly, and as such, formed a nice stair-step decline.
However, the rallies that followed in late June and again in August were far from ideal in terms of favorable price action.
You can see just how choppy USDCHF was between mid-August and October.
So has the pair transitioned back to favorable price action?
It’s too soon to tell, but as choppy as the price action has been since August, the ascending channel that developed is somewhat appealing.
We shouldn’t be surprised by this channel and recent breakdown, though.
The USDCHF tends to do the opposite of the EURUSD, and we know all about the euro’s recent bull move.
It’s no surprise then to see that USDCHF recently broke below channel support.
Whether or not it’s significant is yet to be seen, however.
But I am keeping a close eye on two key resistance areas as we move into next week.
The first is the 0.9930 resistance level.
To see why 0.9930 is such a significant area for the USDCHF, we need to use the weekly time frame.
Notice how USDCHF has used 0.9930 as a pivot in the past, especially the price action between January and late July.
It isn’t perfect, but it is a key area, in my opinion.
Any bearish price action from the 0.9930 region could signal a move lower next week and perhaps a retest of 0.9840 support.
Keep in mind too that 0.9930 could extend as high as 0.9950.
The second resistance area I’m keeping an eye on is former ascending channel support, which should now act as resistance.
Depending on what happens at 0.9930, the USDCHF may not test that former support level until parity (1.0000).
Or, the pair may not retest it at all.
Again, it’s going to come down to what happens around 0.9930 today and early next week.
If we do see sellers defend either 0.9930 or parity next week and trigger a rotation lower, I’ll be looking for an initial move to 0.9840.
A daily close below 0.9840 would open the door to 0.9760 with a break there exposing the inception point of this channel around 0.9690.
I also just shared an intraday pattern in today’s members-only video that could help us time the next move from USDCHF.
Regardless of what happens, though, patience is key.
I don’t want to short USDCHF while this correction higher is intact, especially if the pair closes above 0.9930 today.
[thrive_custom_box title=”” style=”dark” type=”color” color=”#fef5c4″ border=”fadf98″]
Want to watch the USDCHF video I just released in the member’s area?
Get a Lifetime Membership Today and receive exclusive member-only content including one to two new videos every day. Save 40% in October!
[/thrive_custom_box]
