Transcript of Video
Hello everyone, this is today’s video analysis for January 11, 2019. Today we’re going to take a look at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis.
A couple of different trends here on the USDCHF. Over the past several months, we see of course the rising trend, the black trend line, as the market was clearly moving up from the low point down here into the mid-0.9540s, 0.9550s area down here at the bottom of the black trend line, all the way up into the 1.0100-level and the cap of the trend.
Since then, and let’s just measure that candle with our crosshair. That was back on November 13. Since November 13, we have more or less been in a downtrend, moving from that high point into the 1.0100-level all the way now back into the low point into the low-0.9700-level. Making a little bit of retracement over the past day or so, pushing back from that low back into resistance into the low to mid-0.9800-level.
So, been a previous uptrend. Current downtrend. It hasn’t been as smooth of an uptrend or smooth of a downtrend as it was an uptrend. It’s been very rocky over the past couple of weeks, but that’s to be expected during the holiday period, holiday season that we were in while this market was moving down. A little bit of a back and forth market.
But here we are, coming back into the market here and we could see a rise yesterday capping out as resistance. 100-period moving average fairly flat and no real expectation of trend with that moving average quite yet. But at least right now, we are underneath the moving average, we’re under the trend line, and that remains the focus of direction here for the USDCHF. Forex Black Book is red. That also gives us a bearish expectation as well.
Incidentally, Fibonacci from the low to high of the black trend line – the previous uptrend – puts the 50 percent right around the 0.9835 or so level, which is our current resistance. So, we’re just underneath the 50 percent of the black trend. Fibonacci of the blue trend. Nothing really existent right now around the current market price. I’ll just draw that in there real quick, so you could see. If I draw it in from the high to the current low, nothing really right around this. A little bit higher. Closer actually. .382 of that range sits closer to the 100-period moving average.
So, not really helpful on the current market price. I suppose you could probably find some Fibonacci of one of these shorter ranges. Let’s zoom it in a little bit. You could see over the past couple of weeks, rallies. We drew this out here in the Trade Room yesterday. The rallies. The resistance. Fall. Rally. Resistance. Fall. Rally. Resistance. Fall, where the circles are here on the chart. And we noted that yesterday it had rallied into the pink zone yesterday and even then, moved to the green zone, pushing into the 0.9830, 0.9840-level.
But the rally was there. So, what we’re looking for is clues to resistance and potential reversal to go back down. That may lead us to a new low if the downtrend resumes. Of course we want to be watchful for uptrend behavior as well, but right now we’re watching this green zone with intention, wondering if it’s either going to break above it and continue to move higher or bounce off it and go lower.
Let’s go ahead and take all this down to the four-hour timeframe. Begin studying it here. Take a look at it. It came right up into, well, the pink zone first. Didn’t stay there very long. Pushed right through it and now into the blue zone. We often talk about looking for clues and evidence in the Trade Room. What is the market telling us about this? As it approaches the pink zone, we look for clues and evidence, whether it was going to break through it or bounce off of it.
And really didn’t give us a clue to either one. It just hesitated for a little bit and then continued to pressure higher. But I think we’re seeing something different here at the green zone. Clearly the market was unable to sustain a break above 0.9840 and the green zone. It tried. It closed and then it opened a tad bit lower and now pushing back down. So, the question is: are we going to see another rally run at that green zone, 0.9840, and eventually a break and a move higher to the next resistance level, or will it now stay underneath the green zone and begin falling back down to the pink zone or lower again?
That’s what we’re looking for. Clues and evidence here. Let’s zoom in one more time. Often, you’re looking at – in this case, we’re looking at Japanese candlesticks to give us a clue to what the market might do. We talk about infusion of sell orders, infusion of buy orders, and the candlestick formations that apply there. I think it’s very interesting what we see right here. The blue candle pushing up. Closing by the way. The blue candle closing at 0.9845.
The next candle opens up a tad bit lower at 0.9835. So, this candle – actually the open of that was 0.9842, so we’re a couple of pips lower on the red candle than we were this one. If you’ve been studying Japanese candlesticks, you know that that may indicate some short-term reversal, and that’s what we’ve already seen. We’ve seen that a little bit. The question is will that remain. Will that stay true?
We have some news about 35, 40 minutes from the recording of this video. Some news out of the US. If it’s poor news out of the US, we may see this fall right back off, heading back down to lower levels. Sell off of the USD. If it’s good news, we may see another run here. So, watching the news here in about 30 minutes, 35 minutes or so for positive or negative news. If it’s positive for the US, we may see another run higher. Negative, we may see another run lower. Keep an eye on the USD index. Whichever way that goes is the way you expect this USDCHF to go as well.
So, holding resistance, watching for clues to reversal to go back down or breakout to go higher 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.