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Daily Forex Analysis: USDCHF Trade Solutions

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I have two solutions that I may use for the USDCHF in trading the pair. The first is the most obvious. The continued break out to the top side. I think eventually we will see a bit of a pull back to the 1.0400 area but the one I am looking at the most will be a break to 1.0600 in the coming days if not tonight. 1.0600 is a target left unfilled since Sept. 9th 2009. The candle was a wicked drop from 1.0601 to 1.0432. However, three previous days have tried at this point and failed. Yesterday, 12/22/09 and 12/17/09 all broke 1.0500 and failed to gain further ground. Yesterday's high was by far the best attempt reaching 1.0524 in late US trade. The strength this time may continue into Asian trade. Since there is weekly Resistance at 1.0531 I will be looking to initiate a trade at 1.0530 with a target at 1.0580/90 a little before 1.0600.

The next trade I will be looking for is a Retracement of the last few weeks higher. This would initially target the red box shown below and would then either falter or strengthen. I have drawn the possible scenarios on the modified MACD I use, at the bottom of the chart. In any case the ADX will cross above the -DM signaling that at any moment price may give away and begin falling. Should ADX continue upward fallowing price action then the above scenario and further could be expected.

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Last Updated on Thursday, 28 January 2010 01:07

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