USDCHF: Upper line of bearish channel tested as pair may re-enter it after support lost above .9450 today
The medium term daily candle chart below shows the price history of United States Dollar (USD) versus the Swiss Franc (CHF). This currency pair is known as USDCHF, and is trading around .9366 around time of publication and near session lows.
At the start of this month in Ideas You Can Trade when USDCHF was last reviewed, the lower support line of a medium term bearish channel was tested, and a concurrent longer term bearish trend line (red line on chart below), was failing and the trend was described as likely to see a lower-low. That longer-term line is intersecting again below current prices - around .9300, and which looks like the next downside support target.
Since the last post on May 1st - mentioned above - USDCHF dipped below .9100 before recovering to its May high of .9542 this past Wednesday, and then in the last two days has dropped sharply towards today's low. If the medium term bearish channel is re-entered a lower-low should be reached in June, whereas if support is regained near .9450 - just above today's high - then the pair could avert a bearish continuation.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ .9451 with a Limit to take profit @ .9486 and a stop-loss @ .9424 Risk/Reward Summary: Limit risk = 35 pips profit / (-27) Stop-loss risk = Gain to Loss ratio = 1.29
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ .9343 with a Limit to take profit @ .9299 and a stop-loss @ .9375 Risk/Reward Summary: Limit risk = 44 pips profit / (-32) Stop-loss risk = Gain to Loss Ratio = 1.37
Medium term daily candle chart: