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 July 13, 2017. In a moment, we’re going to be taking a look at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis, but first I want to recap the trade suggestion from yesterday.
Yesterday, my morning analysis video talked about buying into support on the GBPUSD. The support that we were talking about is the yellow zone that you see at the top of the chart. I’ll just put a black arrow there. It was right here at the 1.2870-level. So, as you could see, if you would’ve taken that buy at 1.2870 yesterday, the market did exactly what we thought it might do and go up to the green-shaded area, which is of course our current resistance level.
We spoke about the three black circles here, where for several days during those periods we saw the market bounce around between the yellow and the green zone. So, that’s the same area that we’re in right now, between the yellow and the green zone, where we saw it bounce around back here. We’re in that same zone now. So, buying yesterday. Profit from 1.2870 back into the 1.2930s if you were able to stay with the trade.
Unfortunately, I got in it. I saw profit. The trade manager took me to break even. It bounced down. Took me out at break even and then proceeded to go in the direction that I was looking for it to go and was unable to get back in at 1.2870 after that break even stop loss. But if you got in, a good profit could be seen back into 1.2935. It’d be difficult to buy it right now into resistance under the green-shaded area. Not really a great place to go long.
In fact, the only reason to go long again is it goes back to the yellow zone or breaks through the green zone are the only two reasons you would go long right now. Until then, if you look at history, we show a lot of resistance around the green zone. There may be an intraday opportunity to short a bounce off of 1.2935. Just be cautious and careful with that because we have seen the USD taking a little bit of a hit over the past couple of days.
All right, next, moving over to the US Dollar versus the Swiss Franc [USDCHF]. We’re looking at the daily timeframe. Of course if I zoom out a little bit, not too hard to see we have been in a downtrend for quite some time. We go back here to the left-hand side of the chart and we could see these three black circles. I’ll zoom over just a little bit so you could see them better.
You see the three black circles. The market hit the green zone and that became a reversal point for the USDCHF. In a similar situation, we saw the market recently hit the green zone and has bounced back up. We really have two things to consider here. One is that this could be a reversal point again. As we could see back in time, it was a reversal point. So, if that’s the case, we’ll watch for evidence and clues to reversal. Higher lows. Higher highs. A shift in the pattern of the trend. Otherwise, we want to consider the fact that it could just be a pause in the downtrend and we would be looking for it to go back down in the direction of the downtrend, so we want to watch for that as well.
Let’s go ahead and zoom it in a little bit here on the daily timeframe, and you could see this little period of ranging or congestion, whichever you want to call it. Short-term range or an area of congestion as you could see it between the pink and the blue-shaded area. I have it outlined with a black box. The blue zone, 0.9660 to 0.9675. The pink zone, 0.9620 to 0.9600. So, let’s just count them out. Including today, eight and this is the ninth day. It’s hard to see that candlestick underneath the box there. Let’s see if we can pull that over a little bit so you could see that again. The ninth day there. There it is right there.
For nine days we’ve been between the pink and the blue zone. The question is: how long will that continue? Will that continue to bounce around between the pink and the blue zone or will it break out? We don’t know. So, what we’re going to look for are opportunities to trade within there until we get that breakout. Of course if you’re going to buy it, the best places to buy it would be the pink zone down here towards 0.9620 or even 0.9600, or it breaks above the resistance, which is the blue zone.
So, those are your two reasons to buy the USDCHF. Either at the pink zone or above the blue zone. That provides lower risk and higher potential reward. If you’re looking to go short and sell, then the blue zone becomes a potential opportunity, or the next thing you would look for would be the breakdown of the pink zone underneath 0.9600. So, we could clearly see these are our opportunities here for the USDCHF. We’re selling the blue zone or under the pink zone. We’re buying the pink zone or above the blue zone.
So, we have to make our decision for the day. The USD has had some weakness over the past couple of days, so if that continues, we actually would look to sell resistance, the blue zone, target the pink zone or lower if the USD weakness continues. If we see any bullish move for the USD, we likely look for the breakout above the blue zone, which it obviously hasn’t done that quite yet. So, staying within here and looking at the continued weakness that the USD has had much of the week, especially across other pairs like the USDJPY and the GBPUSD that we just looked at, and especially the USDCAD we’ve had some weakness. AUDUSD and NZDUSD is taking a run higher, which, again, is a weaker move for the USD.
So, it’s been that way across the board. We don’t see a lot of that here on the USDCHF yet, but it’s been that way a lot across many other currency pairs. So, if that continues, we would look to sell the resistance, break the support, and a continuation of the downtrend. The risk is pretty simple. The risk is a break above the blue zone continues the upside pressure for the USDCHF this week.
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.