Categories: Technical Analysis

USDCHF set to regain bid tone around channel support

USDCHF is trading lower intraday after the better than expected inflation data yesterday. However, the pair is approaching a critical support zone, which might result in a buy opportunity. There is a bullish divergence forming on the 4 hour chart as well, which adds value to the bullish bias in the short term.

There is a channel forming on the 4 hour chart, as can be seen below. There is also a support at around 0.8840/50 levels, which also coincides with channel support. If the pair trades closer to this support zone, and forms a bullish divergence on the hourly chart as well, then we can jump into a buy trade. Remember the highlighted channel support should hold for this trade plan to be valid.

Initial target should be around 0.8920 level, and final target could be around 0.8950 level. Stop should be triggered on a 4 hour break and close below the channel support region.

Reviewing yesterday’s events and trades
Yesterday in the European session, the German industrial production data was published. The outcome exceeded the expectations, as German IP registered a gain of 0.4%. This boosted the EURUSD pair, as the pair turned higher to trade above the 1.3710 level. The market seems to be dumping US dollar today as well, as the pairs such as EURUSD, AUDUSD and GBPUSD are trading higher. EURUSD traded as high as 1.3766, and GBPUSD broke 1.6640 resistance zone. AUDUSD pair also jumped to new highs earlier in the EU session.

Fundamental Outlook for the day
Today, during the NY session the Canadian Housing starts and building permits data will be released, which could affect the USDCAD pair in the short term. Later, US JOLTs jobs openings data will also be released. Two FOMC members Plosser and Kocherlakota will be speaking, which could trigger some moves in the US dollar. It would be interesting to see whether EURUSD and GBPUSD pairs can manage to hold gains in the NY session or not.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: USDCAD, NZDUSD, USDJPY, AUDNZD, EURCHF and EURUSD.
Get it HERE: Vladimir’s Markets Forecast

Have a great week friends. Happy trading!

Vladimir Ribakov

Following 11+ years of trading experience, trading my own accounts as well as for hedge funds and brokerages, I have decided to fulfill my destiny and to personally mentor Forex and Commodities traders. When I released the “Broker Nightmare” (software that hides trades from brokers) 8 years ago, I found an overwhelming number of frustrated people who genuinely wanted to learn how to trade the Forex market, but instead found themselves scammed and misled. Over the years I have also release other trading systems based on my trading strategies, and met a lot of people on my worldwide Forex seminars. We’ve formed a close Forex community and we meet once or twice a year in various locations in Europe.