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 December 1, 2017. Today we’re going to take a look at the US Dollar versus the Swiss Franc [USDCHF] for today’s trade analysis.
A couple of different trends that we want to look at. First off, the red trend line as the market was moving higher all the way back here from, and let’s put the crosshair right on it. We’re looking all the way back in September 8th we started the uptrend along the red trend line and moved all the way through the resistance high into early November. November 2nd we made the highest high and we’ve been moving down ever since along the black trend line.
So, rising trend and then a reversal and we’ve been falling along the black trend line. We’ve had a pretty decent pullback. We’ve come from all the way up here into the 1.0035-level all the way back down here into the 0.9700s. The upper 0.9700s. A little bit of a pullback over the past week or so back into the mid-0.9800s, but currently the trend is still down. Now, we’ve had, like I said, about a week or so a little bit of a rally within the overall downtrend, but I don’t think that takes precedent right now. I think we still look for resistance and the possibility of it turning lower in the direction of the black trend line unless or until the market breaks above that black trend line. Then we start to look for reversal once again to go back up.
So, there’s some interesting things about that black trend. Of course we saw the congestion, resistance at the box at the top of the chart. The blue box. Then it started moving lower. And I want to point out this area right here, and let’s just take this red box and put it right about right here. Let me make it thicker so maybe it’s easier to see. So, right there, where the red box is, you could see the market went into a period of congestion again and broke out. And probably what’s interesting now is that we’re in a similar scenario here.
Let’s make this one a different color if I can just to make it easier to recognize the differences here. Let’s make this one black. And so, you could see the blue box and then the red box, and now we’re in the midst of this black box down here. So, if we’re going to look for an opportunity, we basically want to trade the pattern of the trend. And clearly the pattern of this trend is falling congestion zones or falling ranges, whatever you want to call them. Falling consolidation periods.
So, we saw the congestion here. Breakout lower. Congestion. Breakout lower. We’re in the midst of another congestion period. So, if we’re going to trade the trend, trade the direction the market has been going in, we’re selling resistance or breaks of support. We saw the market yesterday test the 0.9880 or so level right here into the purple-shaded area. Sudden pullback. Sudden sell off back underneath the orange-shaded area. So, the orange zone becomes our area to consider today.
Let’s zoom it in one more time. Four days now holding resistance underneath the orange-shaded area. So, as long as it stays underneath that, I think there’s a greater expectancy that we look for it to turn back down towards the pink zone. Now, it doesn’t have to do that, but that’s the expectancy. Three days. Now the fourth day finding resistance. 0.9835. 0.9885. As long as it’s underneath it, that becomes our resistance zone. And of course only if it gets back above it do we look for it to pressure back towards the purple-shaded area.
And again, that still would be within the direction of the downtrend. A break of the black trend line, the purple zone would change likely the entire scenario. It changes the pattern of the trend. The next thing we’re going to look for is the breakdown of the pink zone and the continuation of the pattern. Just like it did here at the red box and just like it did here at the blue box, breaking support at the blue-shaded area, the purple zone. Now the pink zone becomes a new fall towards, at first, the green zone, which would be 0.9765, 0.9750.
So, that’s the pattern of the trend. That’s the direction the market is going in right now for the USDCHF. And really I think the only thing that changes that is a push above we’ll call it 0.9880, 0.9885. That’s the purple zone, the black trend line. A break above that, we’d look for a change of this pattern. So, with all of that said, we’re looking for a short. We’re looking for a sell as long as it’s underneath the orange-shaded area. The risk is pretty clear. We don’t want it to get above the orange-shaded area today.
Let’s take it down to the four-hour timeframe. Now, as we get down here to the four-hour, you could see all of that, and let me zoom out a little bit. There’s our black trend line. There’s our three boxes. Blue, red, and now the black box showing us the pattern of the trend again. That’s what we’re looking to trade. We could see yesterday. Let’s zoom it in one time. We see, over the past couple of days, a rally above the orange zone and a fall. A rally above the orange zone to the purple zone yesterday, and then a sudden fall. And now today we’re holding underneath 0.9835-level.
So, for as long, again, as it’s underneath that orange zone, we look for it to go back to the pink zone. And only if it breaks above the orange zone do we look for it to go back up. So, if we take the short today, we’re looking for stop losses above the orange-shaded area to minimize our potential risk if the market decides to go back up rather than go down. And of course we’ll target the pink zone or lower. Again, we’re already know that if it breaks the pink zone, the continuation of the pattern goes down into the mid-0.9700s.
Something else interesting here that I looked at earlier. The Forex Black Book indicator, one of the indicators that is available for our Prodigy program members, is red. That means that the momentum indicated using that indicator is bearish now. Red means bearish. Green means bullish. And so, right now we could see that it’s turned red because the overall momentum. Again, the black trend line has shifted to the bear side.
Something interesting about that is you see a bear or sell signal here. Let me circle it so you could see it. There it is right there. That’s that little red arrow. That’s an indication of four-hour momentum turning in agreement with the trend bar. Red Forex Black Book bar down here and a red signal showing us that the market is turning in agreement on the four-hour timeframe in agreement with that bar. So, what that tells us is that trends are coming into agreement when you see a red bar and a red arrow. Green bar, green arrow. That means they’re trying to turn into agreement there.
Now, sometimes the trends change and momentum changes, but at least right now this gives us a little bit additional confidence. That’s what indicators are there to do by the way. Give you additional confidence in direction. So, red arrow, under the orange zone. Downtrend along the black trend line. The pattern is down, so let’s go ahead and look for a short underneath the orange zone, 0.9835, targeting lower levels for the USDCHF today.
From Forex Traders Daily, this has been your daily analysis with Ross. 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.