Transcript of Video
Hello everyone, this is today’s video analysis for December 14, 2018. Today we’re looking at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis.
Looking here at the daily timeframe, two different trends to recognize. Of course the black trend line. Previous uptrend rising from the lowest low on the chart to the highest high. In recent weeks though, we’ve seen a downtrend along the blue trend line, where it fell from the highest high down into right about the 0.9900-level. The purple-shaded area right here towards the middle of the chart right around 0.9905, 0.9890.
Purple zone. A couple of things happening there. Taking Fibonacci of the black trend. Low to high of the black trend puts the .382 Fibonacci retracement level of the black trend right here at 0.9905. So, that’s right there at that purple-shaded area. We could see that’s where the market bounced as support. Not only that. 100-period moving average waving into the chart here, sitting right here right around the 0.9890 area right at the bottom of the purple zone.
So, we challenged. We came back down along the blue trend. Challenged the .382 of the black trend line. 100-period moving average. Found support there and now have bounced back up. So, the question is: will this be the beginning of a new leg of the uptrend or will it just simply find resistance again and fall back down? Pink zone is what we want to study for that today. 0.9965, 0.9980 is the pink-shaded area.
Let’s go ahead and zoom it in on that. Here we are. You could see historically we’ve seen resistance here before, where the market has found resistance and turned back around. We challenged it multiple times. Many false breakouts above the pink zone. Heading to the green zone, 1.0000 or parity, and turning back around and going back down.
So, how will we have confidence that this is really actually going to break above this 0.9980-level and continue to go higher? That’s what we’ll talk about later in the Trade Room. Looking for confidence that it’s actually breaking this rather than a false breakout like what we see all of this period right here while the market challenged above, but never broke above and made a new low.
Getting above the pink zone, of course we will look for it to rally back up towards the green zone, which is 1.0005, 1.0025. The green-shaded area here. That will be our next resistance level there if it can break higher. If it doesn’t and bounces back down, we already know pretty well that it could go back down to the blue zone. That’s exactly what happened back here. And anything below that challenges the new low at the purple-shaded area.
So, pink zone is really what we want to watch today. Four-hour timeframe. Zoom it out a bit here, so we could see that. So, here it is. Here’s many times getting above that pink zone back here. We may reevaluate this pink zone as we get into the Trade Room later today. Maybe shift it around a little bit. But it’s in that area, 0.9965 to 0.9980. It could be a little bit lower. We’ll see that in the Trade Room today, going up towards 1.0000, the green-shaded area as a significant resistance area.
So, we’re watching for the breakout above the pink zone, heading to the green zone, or resistance and reversal right back down. Keep an eye on the USD. It’s challenging multi-year highs, and so we’ll talk again about that in the live Trade Room today. But challenging multi-year highs. If it breaks out, we could see a significant continuation higher for the USDCHF if the USD breaks its resistance highs. And if the USD cannot break its resistance highs, right back down it goes and we could see some reversal back down to the downside here for the USDCHF as well.
So, challenging this pink zone. Again, I think we’re going to probably adjust this pink zone a bit in the Trade Room just looking at it here. We’ll do that in the Trade Room later today. But keeping an eye out for breakout higher above the pink zone to continue the uptrend, or some sign or evidence of reversal from here could send it back down for the USDCHF today.
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.