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I’m going to begin the day today on the US Dollar versus the Swiss Frank [USDCHF]. First, before I begin today’s analysis, it’s important for me to bring up that due to the US Government Shutdown, non-foreign payrolls or jobs data release has been postponed and will not be released today. Now, also, if you have never attended my Daily Trade Room or if it’s just been a while since you have, I’d like to invite you to join in today at 10AM Eastern Time.
Every day I discuss each of the currency pairs that I do here in the daily videos in detail and show you exactly how I determine the best places to get into the market or out of the market. So, if you have been struggling to make sense of the Forex or you just need some confirmation to your own strategies, I look forward to seeing you in the Daily Trade Room. You can log into the Trade Room from the Your Daily Analysis or Forex Black Book members pages.
Okay, so let’s get into today’s analysis on the USDCHF, starting here, on the Weekly Chart. Over the past several weeks, we’ve been discussing the supports into this yellow-shaded area. It’s a multi-month, or you might even consider it multi-year support here into this yellow zone. You could see, over the past of days or weeks, we’ve been challenging into this yellow zone, but we go back here in time. All the way back into January of 2013, back at the beginning of the year and end of 2012, we can support in this area.
You go all the way back here to the left-hand side of the chart, all the way back into the beginning of 2012, where we can see some historical support in here. So, many times finding support into this yellow-shaded area just underneath it or just above that yellow zone, surrounding basically the 0.9000-level for the USDCHF. If we can break underneath here, which over the past several years we could see attempts to break underneath this yellow-shaded area. We see candles getting underneath it and then getting right back above it or spiking into it and right back above it. We see many attempts over the past couple of years to get down through there and right now is no different.
We see an attempt to get down underneath there, but no confirmed break of that level. If we can confirm a break, which I think may be a couple of weeks for this currency pair, we could see a week that it gets underneath it. And as long as it stays underneath there for a full entire week, then yes, I expect that we’re likely looking for this to continue to pressure lower. But if it turns right back around today or even into next week and gets back above the yellow-shaded area, we could look for trend reversal and a continuation just like what we’ve seen over the past couple of years.
So, definitely, over the next couple of weeks, will be significant for the USDCHF. Let’s take that information down to the Daily Chart. I’m going to take it down to the Daily and zoom out a little bit so we could see the past attempt to break underneath this yellow zone. We saw a quick spike into the yellow zone, back there, at the beginning of the year, and then a complete turnaround. Now, currently, we’re seeing a little bit of a different price behavior, where instead of a quick spike and a return back higher, it’s just continued to drift lower as it continues to pound deeper and deeper and deeper, in towards the 0.9000-level.
Now, it hasn’t been a complete breakout or a complete continuation of the trend. It’s just continuing to pound a little bit lower and continue to push the envelope as it tries to break out. Again, if it gets right back into or above that yellow-shaded area, breaks above that blue trend line, and changes the trend pattern, then we’ll look for a turn back higher again. Right now, as long as the pattern stays as is, there’s potential for it to turn back down in the direction of the trend. So, what we’re looking for is number one: support and reversal indicators, or we’re looking for resistance and continuation potential for the USDCHF.
So, take that information. Let’s actually just zoom in here on the Daily Chart so we could see this a little bit better. Here’s that blue trend line. Here’s this pink-shaded area. And I put this here during the Trade Room yesterday because I think it’s important, where we’ve seen support at the bottom of that pink-shaded area just into the 0.8980s and resistance over the past couple of days. This is the Daily Chart now. The past couple of days, we’ve seen resistance here into the 0.9020-level just at the top of that little pink-shaded area at the bottom right-hand side of the trend.
If we break above this blue trend line and get above 0.9020, we see a change in the trend pattern. The trend pattern is lower highs and lower lows. If we see a change in that pattern, we would begin to see higher highs and higher lows. So, a break of that blue trend line, a break of the current resistance that we’re seeing changes the pattern of the trend. Let’s take that information down to the 4-Hour Chart. There’s the same trend line. Here’s the market attempting, currently, to get back above that trend line.
Now, if you bought it during yesterday’s bank flow levels or a dip into yesterday’s bank flow levels, you’re currently seeing profit and you should begin protecting that profit. So, again, if you bought it at yesterday’s bank flow levels using appropriate trade management strategies with the bank flow strategy, you should be protecting profit now here into the 0.9020s. And if it can break here, you’ll likely look for a continuation of profit. Now, this is your decision zone. This is your decision time right now.
Over the past several days, we have found resistance into 0.9020. Here we are again, testing 0.9020. We’re also challenging the trend line as we speak. So, right now, if you’re looking for a selling opportunity for the USDCHF today, you’re just about at your very closest opportunity to sell this currency pair, as it sits right on top or right underneath that blue trend line and right underneath the 0.9020-level – the top of that pink-shaded area. The only — well, the risk in that is that it breaks above that.
Okay, if it breaks above 0.9020 – opens and closes above it -, you’re likely looking for a continuation higher. The trend bar for the Forex Black Book has now turned dark red, which means there’s some disagreement between the slower-moving trends and the faster-moving trends. One of them is going down and one of them is going up, so there’s some disagreement. So, right now, this could be the beginnings of what could be a potential trend change, especially if we see a change in the trend pattern, higher highs and higher lows being made, which we don’t have yet. But if it breaks through 0.9020, I think that will be the beginning stages of reversal for this currency pair, at least some short-term reversal back into the upper 0.9000s.
So, if you’re looking to sell it, you’re just about at your best opportunity right now at 0.9020. Look for it to challenge the lowest lows into the 0.8980s once again. And then, of course, a break there, look for a continuation of the down trend. If you’re looking to buy this, I don’t think right now – yet – is the opportunity to buy it. I think an open and close above 0.9020 – open and close above there – will be your first clue for a potential buy. You want it to break through that resistance. You don’t want to buy it as it’s challenging the resistance. You want to buy it as it breaks through that resistance.
So, that’s what you’d be waiting for. If you’re looking to buy this on reversal of the trend, you want it to break through that blue trend line – 0.9020. That becomes your opportunity to buy it to target back up towards the 0.9100-level and the top of the yellow-shaded area. So, this is your decision point. 0.9020. Above it, we go higher. Underneath it, we look for it to go lower. Watch for today’s bank flow levels. If they’re similar to yesterday’s, they also could provide some buying opportunities for the USDCHF today.
