Transcript of Video
Hello everyone, this is today’s video analysis for November 7, 2018. Today we’re looking at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis.
Looking here on the daily timeframe, a couple of trends that we want to look at. Let’s go all the way back to the left-hand side of the chart. The blue and the red trend line show the market finding resistance at the top of the yellow-shaded area. The blue circle here. And having some reversal, pushing through the green zone, the pink zone, and on down into the middle of the chart, the 0.9800-level.
Then it came back up. Found resistance again at the yellow zone. Top of the black trend line. Came back down. Pushed through the green zone. The pink zone. Interesting enough here, and I want to point this out where the top of this black box is, historical resistance into that pink-shaded area. Then it came down. The rising blue trend line. The blue trend line has been an uptrend for quite a long time and we’ve seen the market push all the way up through the yellow zone. False breakout, turn around and now pushing back down.
With our election results and the market has sold off on the USD. At least for the moment, it sold off on the USD since we’ve seen election results here in the US. We’ve seen the market push through the green zone, which we talked about as a possibility during yesterday’s Trade Room. Now targeting down into the 0.9965, 0.9980-level, the pink zone again, which again, remember back here on the left, that pink-shaded area was resistance over here on the left.
And so, once we see it get down through there, that becomes our resistance. So, if we’re looking for a breakout, if we’re going to look for it to go lower, continue the downward momentum, that’s the first hurdle that we need to get through. It needs to break through this hurdle before we can have confidence it’s going to go lower. I mean look at the current candle.
Yes, it was a significant sell off all the way from the 1.0025 or so level now into 0.9965, but it’s come to a complete stop here at 0.9965. And the question is will it break through here and continue to go down, or will it bounce off and turn around and go back up. So, that’s what we’re waiting on. Some evidence that it’s actually going to break through here and continue this downward momentum and find resistance under the pink zone like it did back here on the left-hand side.
Let’s zoom it on this a little bit. So, again, what we’re looking here at the pink zone – it’s a little difficult to see here because it squeezes it out a bit here on the daily timeframe when I zoom in. But again, it’s that 0.9965-level. We see it holding there right now. It’s not too hard to see. The current market just sitting there at 0.9965 and unable yet so far to get down through that pink-shaded area.
Let’s go ahead and take it on down to the four-hour timeframe. So, really what we’re looking at here for the day today is one of two potential outcomes here at the pink-shaded area. One is it could do what it did the last time we were here. I’m talking about right here in the middle of the chart. Find support, turn around, and go back up. If the selloff of the USD becomes a temporary selloff and we see the buyers step back in, this turns around, breaks back above 0.9980, and begins heading back higher.
Secondly, we’re going to watch for the clear breakout underneath the 0.9965-level, and then we’ll talk about the correlation of the USD to the USDCHF later on in the Trade Room today, and we’ll talk about exactly what we’re looking for here underneath that pink-shaded area to give us confidence to take the short. But at least right now, we’re just challenging. I don’t think it’s really yet time to take the short. I mean if you really go back in time and let’s just kind of highlight something here.
I’m going to take a circle and draw it out and put it right here. I’m sure there are a lot of folks that right there thought that that red candle getting underneath the pink zone was it and there was an opportunity to go short again and it turned right back around and went higher. We see not too far after that it challenged it. Didn’t push underneath it or close underneath it, but challenged it right here after a significant selloff and turned around and went back higher.
And then of course we’ve already pointed out this period here, where at one point it was a very large bearish move and it turned around and went back higher. So, instead of assuming it’s going to continue to go lower, like you could’ve done those three times and been very hurt, instead of assuming it’s going to go lower, let’s watch for clues and evidence. Price action that tells us that it’s going to go lower. Again, we’ll talk about that a little bit more in the Trade Room. Exactly what to look for, but today we’re either looking for the push underneath 0.9965 for the continuation of the bearish momentum, or evidence of reversal to go back up 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.