Transcript of Video
Hello everyone, this is today’s video analysis for November 21, 2018. Today we’re going to take a look at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis.
Now, it is very important for me to recognize the fact that we are going into what could be a considerable holiday break for many people. As liquidity begins to dry up as the day goes on today, going into the Thanksgiving holiday, many people will be taking off for the next few days. So, less traders in the market. Less liquidity may mean that there’s going to be limited trading activity or also could mean that there is unexpected volatility. So, be careful as you go over the next few days as we go into this interesting week with the extended holiday break that many people will be on.
So, that being said, as we look at the USDCHF, we’re looking at the daily timeframe. We really want to look at two trends here. The blue trend line, which was clearly an uptrend. That’s not too hard to see. It was moving higher, going all the way back into mid to late-September. We started moving higher. Created somewhat of a pattern up here. You see the black boxes as it continued to rise.
In the past couple of days though, we have broken that pattern and we see the market pushing through the blue trend line, the yellow zone at the top, and have had a significant fall back down towards the 0.9930, 0.9940-level currently. And for the past two days, now the third day – Monday, Tuesday, now Wednesday, holding support into 0.9940, 0.9930, the blue-shaded area up here towards the top of the chart.
Follow it back in time just a little bit. I’ve circled it in blue. We’ve seen historical price action around here before. Resistance on the underneath side. Support on the top side. So, we know this area right around 0.9940, 0.9930 has historically been an area of trading decision, and that’s what we’re looking for here. We’re looking for areas of trading decision. Buying and selling. Entering and exiting, because if the market is doing that around these specific levels, it becomes an area where, for those of us that don’t really have control over what’s happening in the market, we may look to make our trading decisions as well.
So, we look at this 0.9940, 0.9930-level and say well, there’s potentially a trading action to happen around here. So, we want to be aware and maybe make our own trading action here. Well, as we could see, clearly as long as, and we’re really just looking at the past two days and now today – as long as it’s above that blue-shaded area, it’s not really a great place to go short. We have seen it test underneath it yesterday, but suddenly reversed and went right back above it. So, it’s not really a great place to go short USD on top of that blue-shaded area.
Again, look back to the left. Support and resistance here again. The only real reason to go short is that it finally breaks through and stays underneath that blue-shaded area, 0.9930, 0.9940. The other reason to go short maybe is that it rebounds a little bit to resistance. Again, you look back here and you could see that resistance into the pink-shaded area. And again, back above the pink zone, we could look for it to go higher.
Purple zone obviously just underneath it is your current support. Interesting enough, 100-period simple moving average lives down here closer to the 0.9895-level and the bottom of that purple-shaded area. So, a couple of. Definitely some areas to consider as you look for opportunity here as we go into the longer extended holiday weekend, definitely want to be sure you use appropriate risk strategies though as you go into this holiday weekend.
So, as long as it’s above the blue zone, I think there could be an intraday opportunity to buy. Targeting back to the pink-shaded area. A little bit of a rebound back higher after the significant sell off we saw late last week and early this week. A little bit of a rebound back towards the 0.9965, 0.9980-level, or maybe even higher towards this green zone up here into the 1.0000-level. All that depends on it staying above the blue-shaded area.
Your risk is you’re buying is under there because you just don’t want it to break underneath it. How deep underneath there of course will be up to you, but using your appropriate risk strategies for your trading account. But the worst-case scenario here is that it breaks through that blue-shaded area. You just don’t want that to happen. So, keeping an eye on it. Staying above the blue zone becomes an opportunity. Buying, targeting the pink or the green zone. Breaking the blue zone is the risk in this scenario. You just don’t want it that to happen if you’re going to be in a buy. And really the only reason to sell it is it gets underneath the blue zone.
One quick peek at the four-hour timeframe. And again, you could see just here, looking at the four-hour timeframe, the difficulty it’s had being underneath the blue zone. We’re right back above it. Clearly right now holding support on top of that blue zone. It really just only makes sense to be buying above the 0.9940-level for the USDCHF today.
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