Transcript of Video
Hello everyone, this is today’s video analysis for February 6, 2019. Today we’re going to take a look at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis.
Starting here on the daily timeframe, three different trends that we can view here on the current viewpoint. You could see the rising trend on the left. The black trend line. Rising trend. Then we went into a little bit of a bearish move along the blue trend line, falling from all the way up here into the low-1.0100s. 1.0115 or so, capping out the top of the pink-shaded area. Moving all the way down into the 0.9700s.
Now we are turning back higher again along the right-hand black trend line, pushing higher, moving back through the 100-period moving average, finding support above there and moving into a new high yesterday. Today challenging that same high. The green-shaded area towards the top of the chart. 1.0005: bottom. 1.0025: top of the green zone. We are obviously today holding underneath there as resistance.
So, the easiest decision that we can make today is buying right now. Going long on the USDCHF is difficult as it is underneath that green zone, so we don’t want to buy as it sits under resistance. And again, let me just grab this little black circle right here and widen it out right here. So, the little black circle along the green zone shows historically right along that blue trend line that underneath the green-shaded area we can see resistance.
So, we know there’s fact here. This isn’t anything we have to make up. 1.0005 has held as resistance before and we’re seeing it resistance now. So, again, then easiest decision I think to make today is you don’t buy or go long as it sits right here at the green-shaded area. Let’s zoom it in one more time maybe. So, there it is there. There’s that green zone. There’s your resistance sitting there. So, you don’t buy right now.
The only two reasons to buy – go long – in the direction of the trend would be one of two things. Either it falls back down to the pink zone and find support and again, that support would match with this historical resistance right here. So, pink zone, 0.9980, 0.9965. That would be a better long or buy opportunity, or the other reason to buy or go long is it finally breaks through that green-shaded area.
So, if we have any thoughts of going long or buying in the direction of our trend, we do it at the pink zone, 0.9980, or above the green zone, which is 1.0025. If we’re not buying, maybe it provides an opportunity for some intraday shorts. As the market falls off the green zone and goes back to the pink zone, it could provide 20, 25, 30-pip profit as it goes back down to the pink zone. Of course your risk in doing that is that the trend continues and pressures back above the green zone.
So, your stop loss of course if you decide to take intraday shorts is going to be just above the green zone in case the market turns back in the direction of the trend. Four-hour timeframe not really going to change any of that. You could see, again, clearly holding resistance into the green zone up there at the top right-hand corner of the chart, and buying right now has been so far a pretty bad idea.
It has found resistance there and not broken through that 1.0005-level and really not really holding above 1.0000 at the current moment. So, the chances of falling back down to the pink zone are there as long as it stays under the green zone. Really don’t have any inclination for this to go long.
One other thing that I was looking at is compare it side-by-side with what we’re seeing on the dollar index. You could see holding resistance on the dollar index as well underneath the 96-level. 95.90, the bottom of the pink zone on the right. So, as the USD is into resistance, we also see the USDCHF into resistance. So, the chances of the USD even finding resistance and having a little bit of a bounce back today is there. So, again, I don’t think buying USD against any currency pair today is going to be extraordinarily fruitful as long as it stays underneath this pink-shaded area on the dollar index.
So, keep an eye on that. We don’t see the USD pressuring through that resistance, which again, means on the USDCHF it’s going to have a tough time pressuring through the green zone. So, I don’t think buying today yet is a fruitful opportunity until it breaks the green zone or dips to the pink zone. Maybe an intraday short opportunity, being careful if the market returns to the trend 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.