USDCHF Fails to Break Above Resistance – What’s Next?

USDCHF Fails to Break Above Resistance

USDCHF fails to break above resistance on the daily chart. The reversal happened after the FBI’s announcement on Hillary Clinton’s emails on Friday. What is next for the US dollar and USD/CHF? Read on for Invest Diva’s IDDA approach to strategy development. [Halloween Version!]

USDCHF Fails to Break Above Resistance – Kiana Danial Halloween Report

Technical Analysis | USDCHF Fails to Break Above Resistance

After breaking above the Ichimoku cloud beginning of October, the USD/CHF pair continued on a smooth-path towards our bullish target of 0.9950. This level has been tested three times in the past five months, which makes it incredibaly strong and important.

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The pair attempted to reach the pivot level of 0.9850, while still remaining above the Ichimoku cloud on the daily chart. However during Monday’s Sydney session the momentum appears to be back among the bulls.

USDCHF Fails to Break Above Resistance – Daily Chart

USD/CHF has recently also broken above a Triangle chart pattern so Friday’s reversal could be a temporary pullback from a technical point of view.

The pivot level falls on the 23% Fibonacci retracement level. A break below this could kick the pair back inside the triangle once again.

Also keep in mind that USD/CHF has a habit of consolidating over the long-term time fram as seen in the monthly chart.

USDCHF Fails to Break Above Resistance – Monthly Chart

Fundamentals

The US dollar lost major ground as US elections were shaken by an FBI announcement about Hillary Clinton’s email. While there seems to be no major findings or anything of significance, the markets got too nervous and showed us a glimpse of what would really happen in case of a Trump victory in this US elections. The USD/CHF turned down from our resistance of 0.9950 towards the pivot level of 0.9850.

This week could be incredibly volatile for the USD crosses especially if the FBI fail to provide any positive information about the emails, in which case we could see further dips in the US dollar.

More on the economic calendar, we have the US Personal Consumption Expenditure released at 12:30 PM GMT which could also impact the USD.

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Market Sentiment | USDCHF Fails to Break Above Resistance

On Friday, 50% of traders were long the USD/CHF pair. However on Thursday 51% of open positions were long. We use our market sentiment as a contrarian indicator to price action, and the fact that the majority of traders are short gives signal that the USDCHF may continue higher. The trading crowd has flipped from net-long to net-short from and last week. The combination of current sentiment and recent changes gives a further bullish trading bias for now.

Market sentiment may quickly change on Monday on further political development in the US, so stay tuned on our Facebook page for my signals.

Trading Strategy | USDCHF Fails to Break Above Resistance

Putting the technical, fundamental and sentimental points of the IDDA approach together, we have a mixed bias as USDCHF fails to break above resistance level.

Bullish Scenario:

Depending on your risk tolerance, you could consider range trading and taking advantage of this week’s potential volatility. First target is set at 0.9950 while higher risk target is set at 1.0055.

Bearish Scenario:

Again this needs to be a short-term strategy with low leverage depending on your risk tolerance. First target is set at 0.9850 and next is the upper band of the Ichimoku cloud.

Stay tuned for market updates and signals on our premium closed Facebook page. As always, when in doubt, book a private session with me to get your portfolio on track.

Here are Invest Diva’s calculations for important USD/CHF approximate levels to keep an eye on:

Support Levels Turning Point Resistance Levels
0.9750 0.9850 0.9950
0.9850 0.9950 1.0055

 xoxo

Kiana 喜愛成
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