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FX Trading – Forex Update: USDCHF Watching News and Waiting for a Breakout

By on October 7, 2020 0 9 Views
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Most importantly here for the USDCHF, we have the fed coming out tomorrow. FOMC and fed statement coming out tomorrow, Wednesday, March 16th, and then March 17th, on Thursday, we have some news out of the SMB. So, over the next couple of days, we could see some significant changes with the analysis for this particular currency pair.

For the day today, we have seen here on the daily timeframe the push underneath, open and close underneath – a couple of days ago – the black box that we have here on the chart. Yesterday, during the Trade Room, we saw the market open and close underneath the black box, come up underneath it, giving us a little bit of an intraday opportunity to try to go short here on the USDCHF.

You could see that. If you look down here at the very bottom of my chart, you could see this is the account history. In other words, closed trades here, and there is that trade yesterday on the USDCHF. There it is right there. 0.9870 was the sell entry. The market went down enough for the trade manager to take me in to break even, and the market went right back up and took us out of the trade at break even. A little bit better actually. It got a little slip better than the close price, but either way you look at it, it came back up and took us out of the trade. Trade manager doing its job as expected.

Let’s go ahead and take a more detailed look at this. Let’s zoom it in one time here on the daily timeframe. Again, there’s that black box we studied over the past couple of days. Most importantly, the historical supports that you see there in the purple-shaded area, between the 0.9860 and 0.9885-level. That’s the purple zone at the bottom of the black box. We saw support back here, support here, and like I said, over the past couple of days, we see the breakout, open and close underneath, the rally back into it yesterday, and a little bit of a dip off of that purple-shaded area.

Now, currently, we’re kind of stuck inside that purple-shaded area. That’s going to be much more evident as we get down here to the four-hour timeframe. Take a look at what’s happened over the past several hours here on the USDCHF as we’ve been stuck inside this purple-shaded area. Again, 0.9860 to 0.9885. With news today, news tomorrow, and news Thursday, we’re likely to see a breakout of this purple-shaded area. Again, yesterday’s sell, the 0.9870-level that we were in from the live Trade Room. We saw the market go down about 25 pips on that candle alone, giving us the opportunity to see break even on the trade.

If you didn’t do it there, of course then it had another opportunity here to see break even on the trade. Now we’re just kind of waiting to see what’s going to happen. If we get some poor data today for the US, we would likely look for the breakout lower here for the USDCHF. So, poor data from the US today, we likely look for the breakout lower, underneath 0.9860 to head on down towards the orange-shaded area as the targeted level on the way back down.

If we get some good news out of the US today with some data that we have at 8:30AM Eastern US time, we could be looking for the push above 0.9885 and begin pushing back into the larger range that we’ve been studying inside the black box. So, good news, we see it start to retrace some of this move from last week. Bad news out of the US, we see it continue that downward streak, pressuring back down towards the 0.9800-level. So, that’s what I’m going to be watching for today.

About 50 minutes from the recording of this video, at 8:30AM Eastern US time, we have some news coming out of the US and we’ll look for a breakout of this purple zone to give us our next opportunity for the day today. And like I said, going into tomorrow with the fed and Thursday with the SMB, we could see dramatic changes for this currency pair. If you’re looking for further retracement of this fall, you need a solid push above 0.9885. If you’re looking for a continuation of the downward slide, I think we need another, new break underneath 0.9860 today for the USDCHF.

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