Hi Traders! USDCHF technical analysis and short term forecast post is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the weekly chart here.
USDCHF W1(Weekly) Chart Analysis – Key Resistance Zone, Bearish Divergence, Stochastic Oscillator
On the weekly chart, the price which was moving higher has reached a key resistance zone that has formed based on the 161.8%(1.00871) Fibonacci expansion level of the first wave and the 61.8%(1.00712) Fibonacci expansion level of the second wave. Also, we have a bearish divergence that has formed between the first high that has formed at 1.00641 and the second high that has formed at 1.00737 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bearish pressure. So based on all this, my short term view is bearish here and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.
USDCHF H4(4 Hours) Chart Analysis – Bearish Divergence, ADX Indicator
On the H4 chart, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 1.00203 and the second high that has formed at 1.00737 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears. Until the key resistance zone (marked in red) shown in the image below holds my short term view remains bearish here. A valid breakout below the most recent uptrend line would be the validation for this bearish view.
Technical Analysis & Forecast Summary
USDCHF W1(Weekly) Chart Analysis
- Key Resistance Zone, Bearish Divergence, Stochastic Oscillator
USDCHF H4(4 Hours) Chart Analysis
- Bearish Divergence, ADX Indicator
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
