Transcript of Video
Hello everyone, this is today’s video analysis for December 5, 2018. Today we’re looking at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis.
We’re starting here on the daily time of course. And as you look here, we’re in a significant area of resistance. The pink-shaded area. It’s a little ways down from the top of the chart. Right around the 0.9980, 0.9965-level. It’s the pink zone that you see here right top of these blue boxes. Let’s take a look at these blue boxes.
Go all the way to the left-hand side of the chart first. The longer blue rectangle back here on the left. Pink-shaded area. Quite a bit of resistance into that pink zone. Look at that back there. All the way back into June and July and August, a lot of resistance into that pink zone. Support into the blue zone and even beyond that into the purple zone. But the pink zone really what we’re focusing in on today.
Yeah, sure, right in the middle of there it went higher, but for the most part, statistically speaking, there was quite a bit of resistance into the pink zone. You go a little bit to the right side. The middle blue box here. Resistance several days. Five days found resistance around the pink zone before finally breaking out and going higher. I point that out because in recent days, we also are finding resistance around that same 0.9980 just underneath by the way the 1.0 parity level. And the market just holding into that for several days now.
Let’s zoom it in a little bit on that. Take a look at this. Several days now. Let’s count them out. Nine days now holding underneath that 0.9980-level. Sure, we’ve seen several spikes above it, but no daily open and close, and I think that’s really the key point that I’m trying to make here, is we have not seen a candle body stay above that pink zone. We’ve seen multiple challenges. Multiple tests. False breaks of that 0.9980-level, but no real significant breakout here on the daily timeframe.
And that’s probably the key point for me today, is that we haven’t seen that. And the only real reason I expect it to continue to go higher is if we do see a full candle body get above that pink-shaded area. Otherwise, potential is greater that we see it turn around and go back down towards the blue zone. So, what’s it going to take? Of course USD selling off. A weaker USD would send this lower. Stronger USD would send it higher. That’s one of the aspects that we need to look at here if we’re trading the USDCHF.
So, right now, and really the market seems a bit confused about it. Yesterday it was a bearish candle. Came right back up into it. That leaves that long wick on the bottom. Today was a bullish candle. Came right back into it, leaving that long wick on the top. The market seems a bit confused about what it wants to do here on the USDCHF.
So, at this point, what I’m waiting for is either the push above and for the market to stay above that blue zone or potentially we look for it to get back underneath this pink zone and begin a journey lower. Now, for that to happen of course, that means we have to wait a period of time. We have to wait for probably at least another daily candle. Today’s candle needs to either close above or below the pink zone. The next daily candle, which would be tomorrow, needs to open and close above or below the pink zone.
So, that means we have to wait a period of time. And sometimes waiting is the best trading decision that you can make. If you’re not sure if it’s a bullish or bearish market, waiting sometimes seems to be the best opportunity.
Now, let’s take it down to the four-hour chart and see that it looks a bit different around this pink-shaded area. Again, we’ve seen it above and below. We’ve seen the market above it. We’ve seen it below it. Yesterday we saw the market significant rally from the blue zone. Got above the pink zone. Touched the green zone and now we’re heading on back down. But again, I think it’s in a similar scenario that what we’ve seen over the past several weeks, isn’t it, where we’ve seen the market challenge above. Get above on the four-hour and then turn right back around and head back down towards the blue zone.
So, at least right now, I have no inclination to buy it into this pink-shaded area because of course history on the daily timeframe shows that there’s no real good reason to buy it. Every time it’s even challenged above here it’s gone back down to the blue zone. However, there may be an opportunity to go short here. If the USD starts to sell off again today, let’s watch the EURUSD to go up. That would be a clue of that as well. If the EURUSD goes up, this would, once again, start to make its way back lower again.
Back underneath 0.9965, targeting back down to 0.9940, 0.9925. The blue-shaded area would be something to watch. Not really ready to do that yet, but definitely something to keep in mind for the day today. So far, no real significant breakout. Really the real deal for me will be this daily timeframe. What’s going to happen here. At least right now, it looks more bearish for me than it does bullish for the USDCHF today.
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