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The #USDCHF price could remain bullish due to the #SwissFranc weakness. If so, could this offer us a long opportunity in the short and long term?
I’m going to take a look at USD/CHF as we could see a slight reversal to the market soon.
Daily timeframe
The Swiss Franc was the worst-performing currency of last week, so it’s showing signs of weakness. The US Dollar is still strong on the strength meter, although it is in a reversal position now.
We talked about watching the AU Dollar for long opportunities, which did rally overnight. However, despite the US Dollar weakness across other currencies yesterday, we had a low ranging candlestick and a bullish close on the USD/CHF.
That’s usually a sign of indecision in a particular market, which showed in the Asia session. The price broke through the daily lows. With a Fib tool, we can go from that daily low to the daily candlestick high.
Four-hour timeframe
In the four-hour timeframe, the price retested that structure area and is now rejecting another area. Typically, when the daily enters an uptrend, we see the market form higher highs and higher lows. That happened in this market until recently, where we had a break to the downside.
But now, the price is forming a double bottom pattern, this could suggest a different move to come. If the price breaks out of the current move and daily highs, we can look for swing trading long opportunities.
The USD/CHF price fell significantly throughout the Asia session, which could be overturned in the European session. The daily lows have been broken and rejected, suggesting a false breakout could occur. With the Swiss Franc weakness, traders could buy the dip. The four-hour timeframe looks to be forming a double bottom pattern. Long-term traders would want to see that pattern finish forming before looking for long opportunities.
But, if we were looking for a day trade opportunity, we should not be looking at this daily timeframe.
15-minute timeframe
There is a different trading opportunity in the 15-minute timeframe. We could wait for a change in cycle after the rejection of the lows. We want that because the market is currently making lower lows and lower highs.
However, we rallied back to the previous structures. If the price breaks out, we can look for a pullback in a continuation move as that would suggest that a bullish engulfing candle or a false breakout of the daily lows is forming.
5-minute timeframe
In the five-minute timeframe, the price is currently breaking out of the midpoint of the Asia session. The midpoint of the Asia session can act as support and resistance; it actually formed a slight resistance before breaking through.
The price is breaking through the midpoint level, which could offer a trading opportunity. If we see the price trading higher, we can look for the potential retest of the midpoint to trade the Asia session highs.
Alternatively, we can watch for the Asia session midpoint to break and retest as that area can be used as support or resistance. If the price trades above the midpoint, it would show that buyers are in control and we can look for long opportunities at the Asia session highs.
If that doesn’t form and the price forms a bearish rejection instead, we could see a continuation back to the Asia session lows.
However, I think that we’re going to see a short-term breakout and a potential continuation of the US Dollar strength against the Swiss Franc because of how the daily timeframe closed. The fact that we’ve already broken through the daily low and the weekly midpoint area, even rejected yesterday’s lows, that looks quite bullish to me.
So, I’m happy to look for potential long opportunities if the price can hold above those Asia session midpoint areas.
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