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I’m going to begin the day today on the US Dollar versus the Swiss Frank [USDCHF]. I’m going to start today on the Daily Chart, taking a look at some of the major levels that may have an influence on market movement today for this currency pair. First off, over the past several days in the Trade Room, we have been studying these two trend lines – the two down trend line that we see here. The red trend line being a longer-term trend line. The black trend line and shorter-term trend line. You could see where they connect at two different distinct highs, but they both connect at the same high here in the middle of the chart right around the mid-0.9200s.
And you could see over the past few days we have broken above both of those trend lines. Earlier this week we broke above the longer-term red trend line and then of course, over the past few days, we’ve seen the break of the black trend line – the shorter-term trend line. So, both of those trend lines have been pushed through, broken above. We’re now finding support on the pink-shaded area. If you follow that pink-shaded area backwards in time, you could see some historical support on the left-hand side over here and you could also see some congestion here. So we know that there’s potential support into this pink-shaded area and now of course we’re sitting on top of both of these trend lines.
So, it’s my expectation today that as long as we stay above this pink zone, which goes between the 0.9025-level and 0.9075-level. It’s about a 50-pip zone. But as long as we stay within or above it, the expectation is that we’re looking for a change in the trend pattern since we’re above these two trend lines. We’re going to push back towards the orange-shaded area and potentially a break above the orange-shaded area continues the uptrend as it pushes back up into the mid to upper-0.9200s for the USDCHF.
Now, all of that will change if we push back underneath the trend lines, get back underneath the pink-shaded area; we’re likely looking for another challenge of the lowest lows for the USDCHF today. I’ve also taken Fibonacci measurements on this chart. I’ve taken three distinct measurements with Fibonacci from the highest high where the black X is at the top of the chart to the lowest low. And subsequently also from the last or the next two highs – the high here with this X in the middle where the black trend line connects to the lowest low and the high here where both trend lines connect on the last X to the lowest low. And in doing so, we find several areas where the Fibonacci measurements overlap.
We have several of those levels that overlap at each one of these highlighted areas. You could see here in the pink zone. Just look to the right-hand side of the chart, where all those blue numbers are overlapping on top of each other, showing us that there’s some Fibonacci levels overlapping in that pink zone. Then the next zone higher is the orange-shaded area and you could see those Fibonacci levels over on the right-hand side once again overlapping and congesting right there into that orange-shaded area.
Under the pink zone we’re back down here into the yellow-shaded area. That is where the next level, where all those levels congest. And then above the orange zone we’re going all the way back up here into the purple zone or really just a little bit above that purple zone is our next resistance. So let’s go ahead and zoom in one time here on the Daily Chart. We can see some of this information a little bit closer. So, our next resistance, if we do move higher today, we’re going back here into the purple zone. Our next support, if we break through the pink zone, we’re back into the yellow zone. Of course that’s where the longer-term trend line sits also. And then of course below that we’re likely looking for the lowest lows to be challenged once again.
I think what’s very interesting that over the past several days, where we’ve seen this bullish market behavior, we’ve also seen the trend bar for the Forex Black Book at the very bottom of the chart turn green, giving us a bullish bias for the USDCHF this week. Let’s go ahead and move down to the 4-Hour Chart. Taking it down here to the 4-Hour Chart, I’ve also taken Fibonacci measurements from the lowest low on the 4-Hour Chart to the most recent high, as it challenged here into the orange-shaded area at the top of the chart. That also is part of the congested Fibonacci that we see here in the middle of that pink-shaded area. The .236 of that fib range actually sits right here in the middle of that pink-shaded area.
Now, over the past few days, we’ve noticed how the bank flow levels have followed along with this uptrend in the market and yesterday. We got them a little bit late yesterday, but we saw the bank flow levels pop up yesterday right here into the upper portion of the pink-shaded area. That’s exactly where we expected them to be because we’ve been studying the support as this has continued to break outside of those trend lines.
So, for the day today, as long as we hold within or above the pink zone, and I might say the top portion of the pink zone, between 0.9050 and 0.9075. As long as hold within or above there, as we have for the past several hours, looking for support and the continuation of the momentum that we’ve been within over the past several days. The uptrend momentum. We’ll look for the challenge of the highs into the 0.9125-level – bottom of the orange zone. A push through there, a push through these highs, we’ll likely look for the 0.9170-level – the top of the orange zone – to be challenged. And of course a break of the orange-shaded area, a break above we’ll call it 0.9170, we look for the continuation back into the 0.9200s for the USDCHF.
The other side of the picture is if it breaks down through that black trend line. Breaks down through yesterday’s bank flow levels. Breaks down through this pink-shaded area and those Fibonacci levels. We’ll likely begin looking for a new fall and a change back in the direction of the previous downtrend. Our next support will of course be here at the yellow-shaded area, into the 0.8970s and 0.8980s. The next level down I have highlighted in green. Let me go ahead and drag this over a little bit further. That’s all the way down into the 0.8900-level for the USDCHF today.
So, the main area to focus in on today will be this pink-shaded area. I believe as long as it stays above the bank flow levels, the pink-shaded area and the trend lines, the focus should be for the buy bias along with the Forex Black Book trend bar down here. The focus should be for the buy bias for the USDCHF today.
