USDCHF - Retracement Complete? Possible Bullishness?

Jun 19, 2023

Analysis:
As we're clearly able to see price was in this downwards trend however we've recently broken out of that trend showing a market shift, indicating possible bullishness. Price tried to push higher over the last month but we've since seen price pullback to the area where price broke out of and we expect that this will be a key level which will hold as support and price will continue its upwards reversal. To add to our idea at this level we also have the 61.8% fib level which is often regarded as the most important fib level as it's the one that is respected the most often, so this gives us more confluence to be long, especially from this area. Fundamentally as well the USD is the 2nd strongest major currency where as the CHF is the 5th strongest major currency so fundamentally this already favours our idea. Looking further though we've seen a decrease in long positions on the USD but we saw an even bigger decrease on short positions for the USD by institutions signalling again that there could be more bullishness for the USD to come. The CHF on the other hand had a huge decrease in long positions and an increase in short positions by institutions so this is telling us that we don't want to be going long on the CHF. Institutions have access to a lot more data then retail traders so if they are shorting a currency then there is usually a good reason behind it that the retail traders may not see. Institutions are also the "big money" in the markets so going against the "market movers" is a difficult game to win which is why we take into account institutional positioning. Overall we have a technical and a fundamental bias to be going long on USDCHF which is why we have a bullish bias.

Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read. We appreciate it all.
Stay Safe - JPI

Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does to. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.

Jun 19, 2023

Trade active

With our entry criteria met and our order filled we're now long USDCHF looking for price to continue its upwards move after this retracement that we've seen.

Jun 20, 2023

Note

Price has managed to show early signs that its holding our area of support so currently this trade is looking good. Only time will tell what will happen however, but for now it's all looking good to us.

Jun 21, 2023

Note

Yesterday we saw another daily bullish candle close which is good for our trade and so far everything is looking good. Later today we have Fed Powell testifying which will cause some market volatility. If we get some hawkish news from the Fed then we could see this daily resistance level be broken. If we're able to break past this level and close above, then we see price sailing straight up to our take profit as there aren't any other levels in the way. If the news is bearish then we will have to wait and see what SNB says tomorrow as again this will be another news event which will have an impact on our trade idea. Currently everything is looking good but we'll be sure to keep you all updated!

Jun 21, 2023

Note

For more confluence as well on the weekly timeframe we're seeing price retest the downwards trendline that we broke out of and it seems to be holding as support currently. We will have to wait for the candle close at the end of the week to be sure of this but so far it is giving us a strong bullish signal.

Jun 22, 2023

Note

Fed Powell spoke yesterday and things didn't look good for the USD so we saw price make a move to the downside, holding this daily level of resistance as shown in the imagine below. Whilst this doesn't help our idea we are still bullish USDCHF due to all of the other factors that we have. We expect that price will retest our entry area for support and then we will see the daily resistance level get broken and price will then make a move to the upside. To add to why we think this, earlier this morning we had some news that came out for the CHF which whilst SNB policy rates met expectations, the press conference after didn't look to positive showing us that the CHF strength just isn't there yet and there isn't bullish momentum for the CHF currently. Later on today we have unemployment claims and Fed Powell testifying again. If these are bullish for the USD then we expect that price will rally and that this daily resistance level will be broken. If the news comes out bearish then we will see how the market reacts and we will go from there but with all of the USD strength that there is at the moment the slightest bit of bullishness for the USD will create the momentum to push price higher. With that being said we'll wait to see what impact the news has later and we'll go from there.

Jun 23, 2023

Note

With Fed Powell testifying yesterday we saw some bullishness for the USD and we've seen price hold our entry area like we expected would happen yesterday(as mentioned in our previous USDCHF update). Today we're retesting the daily area of resistance (as mentioned in previous USDCHF update) but with the bullishness of the USD currently and with the USD news that is coming out later today we expect that price will rally beyond this level and if we're able to get a close past the daily area of resistance then this trade looks like it has a clear path up to our take profit. So far we haven't seen signs that this trade will reverse on us so this trade is still looking bullish and good to us.

Jun 26, 2023

Note

On Friday we were expecting a break of the daily resistance level as shown in the image below, whilst everything was looking good during the day by market close price had pushed back down forming a wick showing potential weakness on the USD which doesn't help out our idea. This does seem slightly bearish but this isn't anything that we're worried about. Our idea is still valid and we still think that the daily resistance level will be broken. Once this level is broken we have a clear path to our take profit so this is what we'll be looking for. On Wednesday and Thursday this week we have some important USD news to come out which could be the catalyst that we are expecting. If this news is bearish then this should break the daily resistance level and give price the momentum needed to hit our take profit. If there are any updates or changes to our idea we'll be sure to let you know so look out for them!

Jun 28, 2023

Note

Update - 7
Like mentioned in our other USD bullish ideas the USD is now the strongest major currency whereas the CHF is the 5th strongest so this just strengthens our bullish thesis further. Yesterday we had some news come out for the USD which was better then expected so this looks like to us early signs that the USD bulls are starting to be tempted to step back into the markets. With the Fed chair speaking later today this could be the catalyst that we need for the bulls to push the USD higher which would push USDCHF higher. Something else to observe is that price has formed a symmetrical triangle which is a neutral pattern. We still expect that price will break to the upside sometime soon which if it does then we should see price rally to the upside. Overall things are still looking good for our bullish thesis and depending on the Fed talk later today this should give price the momentum needed to breakout of this symmetrical triangle and a push to the upside. Once we know what the news is and how the market reacts we'll update you all on our take.

Jun 29, 2023

Note

Update - 8
Yesterday we were waiting for the Fed chair to speak to provide some more momentum for the USD so we could breakout of this symmetrical triangle and make a move to the upside however this isn't exactly what we got. The talk did seem bullish for the USD and we did see the USD make a move to the upside but we didn't get a strong enough breakout of the symmetrical triangle to be convinced that the upwards move was about to happen. Later today we have unemployment claims coming out for the USD. We'll be waiting for this to provide a lot more momentum for the USD and we'll be looking for that breakout to the upside from the symmetrical triangle. Once we see how the market interprets this news and how the daily candle closes we'll be sure to update you all and let you know what we think.

Jul 1, 2023

Note

Update - 9
As mentioned in our previous update for this pair we were waiting for unemployment claims to come out for the USD to see if we could get a break of the symmetrical triangle, and that's exactly what we got. The news came out better then expected so we saw price make a strong move to the upside, breaking out of the symmetrical triangle and a daily resistance level that it struggled to get above recently. On Friday we did see a pullback to a level of previous resistance which we're expecting to hold as support before we see a continuation to the upside. This pullback is healthy and completely normal. This coming week we'll be looking for price to break above the next resistance level before we see a move to our take profit!

Jul 4, 2023

Note

Update - 10
On Monday we did have CPI come out for the CHF which was worse then expected, showing possible weakness on the CHF which favours our idea so this was positive for us. There was also some news however which came out for the USD which was also worse then expected, but we didn't really see the market react to that, showing us the USD bullish pressure we have currently have. Today is a bank holiday in the US so we don't expect to see price move that much in terms of the USD, however on Wednesday we do have FOMC meeting minutes coming out which will provide a lot more momentum into the markets. We'll be looking for this news to be bullish but we won't know this until the minutes are released but once we do know and once we see how the market reacts we'll let you all know our thoughts. Something else interesting which give us more confidence in this setup is the candle close that we got yesterday. Price formed an inverse hammer candlestick pattern which is a bullish reversal pattern. This candle was also at an area of support along with the top of the symmetrical triangle pattern that we've pointed out in our other updates, so we expect to see this area hold and for the bulls to step in here. With all of these confluences lining up together this does give us a very bullish outlook which favours our trade. Again the release on Wednesday will provide us with a lot more clarity so this is what we're mainly waiting for.

Jul 7, 2023

Note

Update - 11
Finally today we might see some exciting price action for this pair. Recently price has been stuck in a range. Every time price looks like it will break an area it ended up reversing so this has been a long trade to get stuck in. However this trade is still to the plan which is why we're still in it and today that patience might finally pay off. Price has formed a new symmetrical triangle which is a neutral pattern but we should see this pattern get broken today for two reasons. Firstly we're at the end of the pattern so price has to breakout today. Secondly we have NFP data coming out today which will massively affect the markets. We'll be looking for this data to help our trade and push price to the upside, breaking above the areas of resistance we have marked out. If we can get this type of price action then we should have a clear path to our take profit. Remember traders, patience is key. Once we see a how the NFP data affects our position, we'll update you all.