USDCHF Short Term Forecast Follow Up And Update

Hi Traders! USDCHF short term forecast follow up and update is here. On June 16th I shared this “USDCHF Technical Analysis And Short Term Forecast” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. 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!

My Idea

On the H1 chart, the price which was moving higher reached a strong resistance zone where the psychological level 1.00 coincides. The price respected this zone and has bounced lower from this zone. Also, the price which was moving higher has created a bearish divergence between the first high that has formed at 1.00367 and the second high that has formed at 1.00498 based on the MACD indicator. The price then moved lower and broke below the last low at 0.99609 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. Generally, after a bearish convergence we may look for corrections and then further continuation lower. Currently, it looks like a correction is happening and in addition to this, based on the Parabolic Sar we could see that the dots are above the price which we may consider as yet another evidence favoring the bears. So everything looks good here for the bears and basically, I expect short term bearish moves to happen here after pullbacks until the strong resistance zone holds.

USDCHF H1(1 Hour) Chart Current Scenario

Based on the above-mentioned analysis my short term view was bearish here and I was expecting the price to move lower further until the strong resistance zone holds. The price moved as per the plan here, after the bearish convergence we had a small pullback and then the price moved lower further delivering 300+ pips move so far! The market provided us with various facts supporting this short term bearish view. We had a bearish divergence followed by a bearish convergence then we had a small pullback and most importantly there were no signs opposing this short term bearish view. Then as you can see in the image below how the price moved further lower after that and provided a wonderful move to the downside.

As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted to us and took the right action according to that.

Happy Trading!

Arvinth Akash
Traders Academy Club Team