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I’m going to get started today on the US Dollar versus the Swiss Frank [USDCHF]. Starting on the Daily Chart, in the Trade Room every day this week, we’ve been talking about trends and different trend lines that we could see here on this chart. We have two distinct downward-facing trend lines. Of course the highest high at the top left-hand side of the chart connecting with the low right here about the middle of the chart. We could see that that is where the blue trend line is where the current market is challenging right now.
A little bit higher than that and a little bit different way to look at the downtrend is connecting this black trend line to this next lower high, but actually connects to the same high that the blue trend line does here in the middle of the chart, and that’s a little bit higher into the pink-shaded area. So, we have two different trend lines, two interpretations of the trend line, but both of them have potential to impact today’s market if the market continues to pressure higher.
So, right now the blue trend line is where the current market sits. And then there’s another trend line here on the chart. The red trend line, representing the upward trend that we’ve seen over the past several days for the USDCHF. So, three different trend lines. Three different interpretations of the trend. All of them have potential to impact the current market as we see movement today and going over the next week for the USDCHF.
Forex Black Book trend bar is green, giving us an uptrend bias. Over the past several weeks, we’ve seen it going up, so we see it’s green today. If it continues to pressure through the blue trend line and through the blue-shaded area, we likely look for the pink-shaded area to be our next area of resistance. And likely, through there, we’re back into the 0.9000s for the USDCHF. If it turns back down and the blue trend line is able to repel the buyers, we likely look for it back down to this green-shaded area, a challenge of the red trend line, and of course, underneath there, were look for a change of the trend, back to the downtrend, and a turn back down towards the lows for the USDCHF.
Let’s go ahead and zoom it in here one time on the Daily Chart. Just zoom it in once. You get a little bit closer view of the market. Taking Fibonacci from the high, where both of those trend lines connect right here at the top left-hand side of the chart where the black X is. Taking Fibonacci where both of those trend lines connect down to the lowest low, we find the 50% retracement level right at 0.8926. That’s the top of our blue-shaded area. If we’re able to get through that 50% retracement level and the top of the blue-shaded area, the .618 sits at the pink-shaded area.
So, let’s go ahead and put a couple of black arrows on here. The black arrows represent trading opportunities. So, we know that the pink zone will be our next resistance. If it breaks above the pink zone, of course we’re back into the 0.9000s for the USDCHF. Currently, if we break above the blue, that’s what we’re looking for, for the continuation towards the pink zone. If the blue trend line and the blue-shaded area repel the market, we likely look for the fall back down and a challenge back to the green-shaded area and the red trend line. That happens to be where the .382 Fibonacci retracement level of that previous downtrend sits. So, each one of the shaded areas – green, blue, and pink – are where Fibonacci levels sit. We could see historical support and resistance in each one of those levels, and those will be our decision zones for the day on the USDCHF.
Let’s go ahead and take all of that information down to the 4-Hour Chart. And as we get down here to the 4-Hour Chart, we’ll let it refresh here and all of the indicators will pop back up into the chart. And there they are. As we get down here, I’m going to zoom it out one time. As we get down here, we could see the blue-shaded area. Again, staying within or underneath – we’ll call it – 0.8930, which is right there, close to where the Fibonacci 50% level is. If it stays within or underneath that 0.8930-level, we could look for a turn back down towards this green-shaded area once again as our next support and the red trend line, by the way, and the .382 fib at 0.8872. That becomes our next support. And of course, underneath that support, we look for the turn back down towards the purple-shaded area, which sits back down towards the 0.8800-level.
So, all in all, what we’re looking for is either a breakout above 0.8930. We look for it to go back to the pink-shaded area, which is back into the 0.8960s, 0.8970s, and 0.8980s. A break above there, we continue back into the 0.9000s. If we see some upward pressure, that would be the expectation. A turn back down from the blue zone challenges the 0.8880-level, 0.8860-level. And back underneath there we go all the way back to 0.8818.
The bias right now is for the upside. If you take a look at the bank flow levels, over the past week or so it has been following and supporting the market. Take a look here into the purple-shaded area. The market has been supported by the bank flow levels and continued to rise higher. I would expect that that’s the direction we want to continue to focus our efforts in. Green trend bar. Forex Black Book. The last green arrow we got is way down here towards the purple-shaded area. Actually, I believe that candle that is on, if I zoom in one time and put a vertical line right on that green arrow, the candle that’s on is that little red candle, but either way the momentum shifted at that point, it hesitated for a period of time, and we see a continuation.
If you took a buy on that green arrow, you’ve now seen some profit. You should be protecting that profit now. I don’t think we have an opportunity to see a new green arrow today, because the market hasn’t pulled back down. Typically that’s when we see a new green arrow, after it pulls back down. Today’s bank flow levels. These are yesterday’s levels supporting the market. I would suspect if we see some more bullish market behavior out of this currency pair, we will likely see today’s bank flow levels – green zone or a little bit higher, depending on how high it gets. If it doesn’t, comes right back down, non-foreign payrolls today drives it back down, we could see those bank flow levels at or a little lower, back down towards the purple-shaded area, where we’ve seen them over the past week or so.
So, again, non-foreign payrolls today could be the catalyst that drives any one of these movements. Either higher to the pink zone or higher, or lower to the green zone or lower for the USDCHF today.
