Hi Traders! USDCHF short term forecast follow up and update is here. On September 8th 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
Looking at the H1 chart, we could see that the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. In addition to this, the ADX indicator gave a bearish signal here as well 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. Until the key resistance zone (marked in red) shown in the image below holds my short term view remains bearish here and I expect the price to move lower further after pullbacks.
USDCHF H1(1 Hour) Chart Current Scenario
Based on the above-mentioned analysis, on the H1 chart, my short term view was bearish here and I was expecting the price to move lower further until the key resistance zone holds. The price action followed my analysis exactly as I expected it to here. After the bearish trend pattern we had a small pullback and then the price moved lower further delivering 280+ pips move to downside before it was blocked by a bullish divergence.
On the M15 chart, the market provided us with facts supporting the bearish view. The price which was moving higher created a bearish hidden divergence between the first high that has formed at 0.97708 and the second high that has formed at 0.97583 based on the MACD indicator, which we may consider as evidence of bearish pressure. In addition to this, there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower further 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.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
