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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

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.

Feb 01 @ 13:05 EST > As daily charts below show, USD has been in a clear, albeit slowing, downtrend for months.  There is also a clear dynamic trendline resistance area above the recent bearish movement on daily.  We have just seen a touch of this downtrend line and the break in the recent counter-trend movement gives us a nice sell with a solid stop (see 30min chart below).

Feb 02 @ 14:30 EST > Pair has made a nice move down, changing stop to 1.0651, right above the recent high the pair made in its move down.

Feb 03 @ 18:12 EST > USDCAD has made a significant retracement on 15min chart.  This presents a problem and an opportunity; first of all, price action has taken out the recent high on the 15min, and with dollar bullishness across the board in recent weeks, it is possible we will see continued movement up on the pair. On the opportunity side, we have a nice 15min support trendline to use as an additional entry should price not be taken out by our stop.  Chart below.

Nov 20 11:14 > Last month (link below graphs), we took two CADCHF buy trades based on a continuation of a channel on the daily chart.  We were looking to catch a bounce off the bottom trendline of the channel and see a move make a new high in the channel.  That is not what happened as price has retraced and is approaching the bottom of the channel once again.  Same general idea as Octobers trades.  Should price close below channel on daily chart (see below), trade is canceled.  Otherwise looking for a break above green entry line on 15min chart.

Only other caveat for this trade is that currently price is consolidating on 15min chart as it approaching our green entry line.  We would hesitate to buy on a sideways break of this trendline.  Should price continue to consolidate through the trendline, we will wait for a break of the yellow trendline to initiate the buy.

Update: Trade is live, price made a rocky move above our first green entry trendline and we took a small position.

Nov 24 10:12 > Due to the lackluster momentum and rocky sideways consolidation we’re seeing on this pair right now, we’re going to move stop to breakeven now and, if it fills, look for re-entry for as long as the channel stays intact.

Previous CADCHF trades located here: http://www.wtfxlive.com/?p=270

CAD/CHF BUY TRADE
Status: Closed
Entry: 0.9511
Stop: 0.9483 [BE - filled]
Result: +0

Prices on the EUR/USD and USD/CHF have shown considerable dollar bullishness in the last few days, but it looks like the long term S/R’s on the pairs are going to hold.  We were looking for either a break of these trendlines or a bounce off them (see http://www.wtfxlive.com/?p=182).  At this point we’re treating price action as a bounce and have taken countertrend break trades on both of these pairs.

Update 11/3: Got stopped out on these trades.  Briefly considered taking dollar countertrend trades, but with the volatility in dollar at the moment, we’re going to wait for a bit before trying another position.

“Better to be out wishing you were in than being in wishing you were out.”