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The USD/CHF pair has made a considerable bearish retracement in the past month, as noted by James Chen “this currency pair has given back virtually all of the substantial gains that it made from mid-April to early June.”  While the pair is in a long-term downtrend, as discussed below, we still feel there is room to take a counter-trend trade on this forex pair.

First chart below shows the dollar index, which is close to an uptrend support line – our trade would be further confirmed by a coinciding bounce off this line.  Monthly chart shows the long term downtrend of the pair, however, of note is the failure of the pair to make a lower low on the last dip.  We’d like to see a solid break of the resistance line shown, while a break below the support line would invalidate this trade for the time being.  Weekly chart shows recent bullish movement.

Recommended reading: James Chen’s Chart of the Day – USD/CHF.

The 1HR chart below shows our entry trendline for this trade, with the 2HR chart showing our initial target.  A break of the yellow downtrend line would signal further bullish movement and we may consider adding to the position.

Update: Trade taken at 1.0560 at break of our entry trendline.  Be cautious of the weekend gap.  Chart below.

ID 07.2 | USD/CHF Buy | LIVE | Entry: 1.0560 | SL: 1.0475

This countertrend break setup is the result of our setup from EUR/GBP Market Setup from 05/05.  More info to follow…

@14:10 ET > This trade is based on a break of our entry line (see 15min chart below).  Stop is above recent high.

@12:42 ET > Looking at monthly chart below, EUR/GBP, which has recently been in a long term uptrend, has broken below our support line.  We’re not going to take a position yet, instead preferring to wait until price makes some sort of tradable retracement or consolidation.

@15:46 ET > For more info on the recent EUR/GBP bearish movement, see James Chen’s Chart of The Day.

After the brief private-BETA-only period of the last three months, we’ve going to resume open trade analysis and live trades here on the WTFX|Live Signal Blog.

AUD/USD

Pending Trade | Entry: TBD | Stop: TBD | Exit: TBD | Profit: TBD

Monthly chart of AUD/USD (below) shows the long term uptrend of the pair.  Whether the 2008 drop was merely retracement or the beginning of a long-term downtrend is yet to be seen.  On the weekly chart, also below, we see the strong resistance area around .9400 (red price-line) and we see the current movement’s uptrend (green line).

Eventually, and most likely sooner rather than later, price will have to break one of these lines, and that is where we hope to find a tradable opportunity for the pair.  Decreasing the timeframe to the daily chart, we see the price range the pair has been stuck in for the last few months as it moves between our two trendlines (red lines).

Because of this channel, a downward break of our green uptrend line won’t be confirmation of long term bearish movement, as it could merely be a continuation of range.  We see this price uncertainty even on the hour chart (below) as price approaches the intersection of our trendlines.  We will wait to see if price makes a strong break before looking for a trade.

GBP/JPY

Pending Trade | Entry: TBD | Stop: TBD | Exit: TBD | Profit: TBD

As the weekly chart (below) shows, the GBP/JPY pair has been entrenched in a pretty solid downtrend for a while.  The recent retracement movement, as seen on daily, may provide an opportunity for a short.  However, we will wait to see whether price hits long term downtrend line (yellow trendline on weekly chart), or a solid bearish continuation movement before taking a trade.

Jan 14 @ 17:19 EST > As seen on both the weekly and daily charts below, AUD/USD has recently broken below a daily support trendline and is now retesting that break.  We are looking for a break of the 1hr support line.  This trade setup will be invalidated if the pair makes a new high on the daily chart.

Jan 15 @ 10:09 EST > Trade taken, info below.

Jan 21 @ 17:32 EST > Exiting this trade at 0.9010 for a nice profit.  Hopefully, we’ll see a bounce off the 0.9000 level and can re-enter on a counter-trend break of the retracement.