Check out today’s free Forex analysis video provided by Ross Mullins. Transcript of Video
Hello everyone, this is today’s video analysis for December 10, 2018. Today we’re looking at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis.
We’re looking here at the daily timeframe. Previous trend was bullish. You see the black trend line going up in the middle of the chart. Significant uptrend here for the USDCHF. In recent days though, we’ve seen a little bit of a change in direction, where we have now seen a new lower high and even now a lower low. So, we’ve seen a little bit of a flip of direction.
So, does that mean we’re going to have a significant down trend line we saw the black uptrend? Maybe. We’ll watch for evidence and clues for that, but at least right now we are in the downward phase and we need to be watchful for trades in both directions. Will it continue the bearish trend or are we going to eventually see a return of the buyers, which I don’t see yet, but I’m just saying that we need to be watchful for both directions even though we are more bearish than bullish right now.
Let’s take a look at the orange-shaded area right smack in the middle of the chart. Right around the 0.9870, 0.9860-level. Orange-colored zone right in the middle of the chart. Follow it back in time. And I’ve highlighted it with the blue circles. You could see the blue circle here finding support and turning higher within the uptrend. You could see on the far left-hand side, the three blue circles showing support into that orange zone as well.
So, much of time, since really June of this year, June of 2018, we’ve seen a lot of support on top of that orange zone, where the market bounced off and turned around and went back up. So, we shouldn’t be surprised if we see that. The only real time, and there’s only one time on the chart where it broke underneath the orange zone was right here, where the black circle is. It broke underneath it, retested it as resistance, and then made the new low within the downtrend. Previous downtrend.
So, our confidence that it’s going to continue to go lower and the trend is going to continue to go down really comes on the breakdown of a support similar to what you see there at the black circle. Something else here on the chart is the 100-period simple moving average. That’s the green wavy line on the chart. 100-period simple moving average. The last time we touched it, and just have to go back to the first blue circle here, where the black trend line is, we touched into it three days and the market turned around and went back higher.
So, if we go to current time, we note that we’re challenging that 100-period moving average today. It’s trying to get underneath it. Friday and Thursday, touching on top of that moving average and holding it as support. Today we’re challenging underneath that 100-period moving average. And it doesn’t necessarily mean it’s broken. I mean we did, even here where the blue circle is, push underneath there before turning back higher again.
So, we need to be watchful. Does it stay underneath or does it turn back higher above the 100-period moving average? We also take Fibonacci of the black trend from the low to the high of the black trend line. We find the .382 or 38 percent retracement at 0.9904. Happens to be the top of the purple-shaded area, where the market is just underneath at the current moment. So, we’re just underneath the .382 of the black trend line.
So, again, there’s a couple of things lining up here right around the orange and the purple zone. We have the Fibonacci. .382 of the black trend at the top of the purple zone. We have the 100-period moving average at the bottom of the purple zone. We know that the orange-shaded area is a significant historical support going back in time, where the blue circles are. So, a lot of things in this area that we need to be watchful of. That’s why we can’t really one hundred percent say that it’s going to continue to go down or one hundred percent say it’s going to turn around and go back higher, because there’s a lot of things gelling together right here in this area or zone into the mid to upper-0.9800s towards 0.9900.
So, we watch this area. Let’s go ahead and zoom it in a little bit. Maybe one more time. There we go. As we zoom it in, again, we’re just challenging and testing. I don’t want to call this a breakout because it’s just a challenge and test of this 100-period moving average. We’ll be watching for real breakout of that purple-shaded area. We can talk more about a real breakout later in the live Trade Room today, but we’ll watch for a real breakout of that orange-shaded area to give us confidence that it’s going to continue to go lower.
The other thing we’ll watch for today is if we suddenly see the USD rally again and this turns back above that purple-shaded area. That may give us a clue we’re looking for it to maybe make its way back at least to the red trend line or a return of the previous rising trend. So, keeping an eye on the USDCHF for breakout scenarios to continue the downtrend or clues to reversal for a turn back higher for the USCHF this week.
From Forex Traders Daily, this has been your daily analysis with Ross. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.