Transcript of Video
From Forex Traders Daily, this is your daily analysis with Ross Mullins, live from Richmond, Virginia.
Hello everyone, this is today’s video analysis for August 11, 2017. Today we’re going to be taking a look at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis.
First off, on the daily timeframe, previously we were in a downtrend. Pretty clear underneath the black trend line. We moved from the highs all the way up here just above the parity level into the 1.0100-level, and then we turned around and started moving back lower all the way down here into the 0.9400s. So, it was quite a long downtrend. Over the past few weeks though, we’ve seen a little bit of a change in that trend, where the market started moving back higher.
Bullish for the USD. Pressuring back higher. Breaking through that black trend line and the falling pattern that we were in. Changing the pattern back to an upside pattern, pushing all the way back pretty close to the 100-period simple moving average and into the mid-0.9700s. Well, over the past few days, we’ve seen a little bit of a pullback or a retracement of that run up that we’ve seen. A push back here into the 0.9600-level.
The pink-shaded area here is very interesting right around that double zero level, 0.9600. Let’s take a zoom in here on the daily timeframe and take a look at this. The pink-shaded area right in the lower part, middle part of the chart. You look back in time. Look at the black circles. I put them there so we can study the history of this pink-shaded area above 0.9600. There’s quite a bit of history and support around this pink-shaded area. The first black circle on the left, four days found support and reversed and went back up into the mid-0.9700s.
Then it came back down a little bit underneath it into the green zone, and then for several days, and really I could take this second circle and widen it out quite a bit like this and say there was multiple days finding support on top of 0.9600 here, where this larger black circle is. And then, just shortly after that, some resistance. So, what I’m trying to highlight on a daily basis around these colored zones on my chart is where the market has historically made some trading decisions. Buying, selling, entering and exiting. Sometimes it’s support. Sometimes it’s resistance, but it’s a consistent area of trading decisions, where the market is entering and exiting.
So, if you look to the right, that’s where the past three days have been sitting. Just above that pink-shaded area. So, when we talk about these colored zones in the Trade Room on a daily basis, we talk about two potential outcomes at each one of these levels. One of those outcomes is it bounces off of it and goes back up. Second outcome is that it breaks through it and goes down. Well, so far the market has had a very difficult time breaking through and staying underneath 0.9600. It challenged it. It tested it earlier today, but unable to stay underneath that 0.9600.
In fact, we’ve seen a couple of times now. Yesterday’s daily candle and today’s showing us some indication that there are buyers here into this pink zone. Why? Because here, the first time yesterday, it hit there and bounced all the way back to the blue zone, leaving this long wick at the top. So, it bounced up, showing us an indication that there were buy orders trying to pressure this back up. And even today, with a smaller body and a longer wick on top, it’s an indication of buying pressure that there’s orders here trying to pressure this back up.
And again, go back to the black trend circle and we saw that before, where there was buyer pressure. Eventually the sellers went out and it went back lower, but there’s these buyers here that are fighting back against the selling pressure, which started earlier this week. So, for the day today, I don’t think this is a good place to sell it. Let’s go with that first. This is not a great place to go short because so far the sellers have been unable and had an inability to break through this pink-shaded area. So, if we’re not going to go short, maybe we have an opportunity for a little bit of intraday long.
Now, in a few minutes from when I’m recording this video, we’ll have some news out of the US at 8:30AM Eastern US time. CPI data. If that comes out anywhere positive or right on forecast or positive for the US, I think that’s going to be a boost for this to go back up from the pink zone at least to the blue zone or higher. Now, if it’s negative, the opposite is true of course. If it’s significantly negative for the US on that CPI data, a breakdown of 0.9600, that double zero level, the pink-shaded area, we’re probably looking for this to target back down here towards the green zone.
So, watch that news. Whichever way it comes out for the USD, that becomes the direction to focus your energies on for the day on the USDCHF.
From Forex Traders Daily, this has been your daily analysis with Ross Mullins. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.