USDCHF could be heading to a major demand zone, but will this offer us a trading opportunity?
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Today, we’re going to take a look at USD/CHF as there could be an opportunity to trade to a big demand zone.
I want to identify the demand zones where the price could come to because we’re seeing a downtrend form at the moment.
We had a huge move to the downside, and some shallow retracements. I’m expecting the price to move lower before we see any kind of turnaround in this market.
The US Dollar is failing to find strength so far, and the Swiss Franc is getting stronger. That could offer a short-term trading opportunity for us.
With this market, I’d like to look at the level at 0.9058. That is a really strong level of support because there are lots of strong bullish candlesticks coming from that area without any real slow down until it reached the highs of 9350.
The USD/CHF is still in a downtrend, forming lower lows and lower highs. If this trend continues, then we need to identify an area where the price could find buyers again. Looking left on the chart, there has been some strong buying activity back at 0.9058. This creates a demand zone which could act as a magnet for price.
That’s showing me that institutions were buying around that level in the past. When I looked at the volume levels within this area, I saw that 9058 was a decent volume level. So, I’m expecting the daily timeframe to come and test that.
With that being said, we could look for short opportunities on the way down.
The price is changing trend on the four-hour timeframe. We were looking at higher highs and higher lows, and now that the price broke to the downside, forming a lower low, it’s giving us an opportunity to look at a potential for a short.
The four-hour timeframe formed a lower low, showing us that sellers are still active in this market. We are not seeing the USD strength just yet, as indicated by the strength meter at the beginning of the week.
If I go down to the one-hour timeframe, the price pulled back down, created this consolidation, then broke out.
The volume levels are saying that 0.9132 is the most trade level within this zone. So I’m going to wait for the price to come back for a short opportunity down at 0.9058.
Moving on to the one-hour timeframe, there has been a consolidation and a breakout. Within this consolidation zone, the most traded level is 0.9132. This could be a level where sellers would re-enter the market. If the price retraces to this level, then we could look for a short opportunity from the 0.9058 demand zone.
Keep an eye on this one. This could be a good move for the remainder of the week or until next week. 9058 is going to be the target. Hopefully, we can see the price push down to that level.
If you’re new to trading, it can be quite overwhelming. But fear not, you can try out trading the USD/CHF currency pair by opening a demo account. When you’re in live trading, our customer support team will be there to assist you.