Transcript of Video
Hello everyone, this is today’s video analysis for August 9, 2018. Today we’re taking a look at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis.
A couple of different trends I want to point out here on the daily timeframe. First is the uptrend on the left-hand side of the chart. The green trend line. Not too hard to see a significant uptrend. Very little pullback within that trend, or a few times down here towards the bottom, where it pulled back, but finding support and moving back higher. So, significant uptrend.
Then we went into a little bit of a downtrend channel. You could see between the blue and the red trend line falling here. Not as significant as the uptrend, but falling here for a few weeks. It went between this red and blue trend line in a channel. Then it went back up a little bit and, for the most part for the past several weeks, and let’s just put the crosshair right on this big blue candle right here. That’s June 14.
So, since June 14, we haven’t really seen an uptrend. We haven’t really seen a downtrend. It’s fairly flat and horizontal here, and I’ve drawn this black box here to show that. We’ve had a few exceptions. A little bit. A couple of times it’s pushed below the black box and one time pushing above. But again, a fairly horizontal trend comparably speaking to the downtrend channel and the rising trend on the left-hand side. So, that’s very interesting for the USDCHF.
The question is of course will we see the breakout higher. Will it start a new uptrend or will we see it breakout lower and start a new downtrend? And I don’t think we can answer that question today because we’re right smack in the middle of that horizontal trend movement or range that this currency pair has been in.
Let’s zoom it in one time here on the daily. And as you could see, there’s a couple of shaded areas. The purple-shaded area at the bottom of the black box. And again, there’s those three periods with the black circles, where it dipped below, but came right back up inside. There’s the period here in the blue circle, where it rallied above and then came back down inside. But the purple zone holding a majority of support. The blue zone somewhat of a hinge point right smack in the middle of our horizontal range. And the pink zone being the resistance within the top.
What’s important about today is we are right at the blue-shaded area. 0.9930, 0.9940 is the blue zone in the middle. And as we can see, going back since June 14, above the blue zone there’s this tendency to challenge the pink zone, which it’s already done. Below the blue zone, it goes back down to the purple zone into the 0.9910, 0.9895-level. So, we know that there’s a decision here that the market is going to have to make.
Either it breaks under the blue zone and the 0.9930-level and challenges back down towards the purple zone, or it stays above the blue zone, 0.9930, and inside and above the blue zone and it goes back to the pink zone. And that’s really been a majority of the price action since June 14. Again, we have those few exceptions, but a lot of the price action has done that. Below the blue zone, goes lower. Above the blue zone, goes back up.
I’ve also put this little blue box here, showing five days now. The past five days, including today, we’ve been stuck between the blue and the pink-shaded area. So, we really need some sort of breakout here if it’s going to go lower, but signs of reversal if it’s going to turn around and go back higher.
Let’s go down here to the four-hour timeframe and take a look at that price action around and inside that blue zone. It’s pressured lower. Found support. Came back up. Tried to get above. Came back down. So, we’re just bouncing around inside that blue zone. So, really today’s price action held up within this blue zone above what we’ll call the blue zone as a support zone, because it was moving lower from the pink zone, found support here, holding 0.9930, and unable so far to break below it.
What I’m going to be looking for today is really some clue that the market is either going to break under the blue zone and go lower or it’s going to break above the blue zone. Let’s change that to blue just for argument’s sake here. And then we would look for it to go higher. So, that’s really the only two things that we’re looking for here on the USDCHF today. A break above to go higher. A break below to go lower. Outside of this blue zone will give us our highest degree of confidence for our trading on the USDCHF today.
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