USDCHF - The perfect chart which tells you a lot!
Ladies and Gentlemen! This chart has so many interesting details to discuss that it worths a longer post. Maybe it even gives us a very good early projection regarding the possible future for the USD in general.
But first of all I have to apologies being such a betrayer! I betrayed my favourite cross, USDCHF not paying any attention to it for the last 1,5 weeks. I was rather watching DXY, GBPUSD, AUDUSD and the most useless EURUSD (which however based on this chart analyses might soon become very ineteresting too again).
I should have already noticed the so many interesting details that these lovely charts have been trying to tell those who take time to read them. Let's have a walk through.
If you check my previous posts, you can see I had a long position which was closed after price retested the daily Kumo, and turned down from there. Since then, I should have already enterred half trading unit long again ard 0,8765, based on Daily Slow Stoch cross, the higher low + the early Ichimoku buy signals on the 4 Hrs chart. I did not do that. The problem is I did not do it even yesterday when price retested Kijun Sen on 4 Hrs chart. But it is still not too late, at least now I see the chances for a blow up in price and for a real massive bullish reversal have been slowly increasing. Why do I think so? These are the arguments:
Daily time frame:
Price printed a higher low (bullish), What's more it has perfectly retested the previous short term downtrend line. It is even better visible on 4 Hrs chart. It is very rare to see something such a perfect match. I am not a big fan of this ABCD bullish/bearish pattern, but you can try to put it on (X - 20/Jan high, A- 13/March low, B - 04/April high, C - 11/April low, D - ...?)
Slow Stoch gave buy signal (bullish), Price trying to break above Kijun Sen (bullish if succeeds), Chikou Span is above Price (bullish).
Price testing the Kumo Cloud (neutral), MACD is flat (neutral), ADX is super low (no trend, no momentum) but DMI seems to cross bullish maybe.
The only thing I don't like is that strangely Tenkan/Kijun cross looks like a sell signal. We have to wait and see if it gets invalidated.
4 Hrs time frame: Price is in a thick Kumo Cloud, which means we will likely see some consolidation, rangebound trading and thus a pull back from 0,8825-0,8850 to 0,8790 - 0,8800. Slow Stoch downturn supports the pullback as well. I don't know if a pullback would stop at 0,8790. Some bears may try to push it even lower, but there will be the major trend support at 0,8760 as well.
DMI is very choppy, can not read it, especially with this low ADX.
All in all I think USDCHF has likely built its bottom and will do a bullish breakout and reversal within a few weeks, until mid may. My bias is bullish, and will try to buy it on dips. Given the 4 Hrs chart setup, I don't think we have to rush. I'd wait for first entry target around 0,8795. I will try to build longs in smaller sizes and in more clips downto 0,8755, and will massively size it up whenever I see a bullish breakout on 4 Hrs, and especially when I will see the trend and Kumo break on the daily chart too! Initial stop will be relatively lower, below 0,8700. But as it is a longer term, strategic trade idea, the risk/reward ratio will be very good. I think this long position can develop into one of the best trades of the year, but we will need extreme patience for next few weeks, and we must be very precise with timing and accurate on position sizing.
I will give you updates and some Options trade ideas as well early next week.
Have some fun until, chill out, relax and enjoy Easter!
But first of all I have to apologies being such a betrayer! I betrayed my favourite cross, USDCHF not paying any attention to it for the last 1,5 weeks. I was rather watching DXY, GBPUSD, AUDUSD and the most useless EURUSD (which however based on this chart analyses might soon become very ineteresting too again).
I should have already noticed the so many interesting details that these lovely charts have been trying to tell those who take time to read them. Let's have a walk through.
If you check my previous posts, you can see I had a long position which was closed after price retested the daily Kumo, and turned down from there. Since then, I should have already enterred half trading unit long again ard 0,8765, based on Daily Slow Stoch cross, the higher low + the early Ichimoku buy signals on the 4 Hrs chart. I did not do that. The problem is I did not do it even yesterday when price retested Kijun Sen on 4 Hrs chart. But it is still not too late, at least now I see the chances for a blow up in price and for a real massive bullish reversal have been slowly increasing. Why do I think so? These are the arguments:
Daily time frame:
Price printed a higher low (bullish), What's more it has perfectly retested the previous short term downtrend line. It is even better visible on 4 Hrs chart. It is very rare to see something such a perfect match. I am not a big fan of this ABCD bullish/bearish pattern, but you can try to put it on (X - 20/Jan high, A- 13/March low, B - 04/April high, C - 11/April low, D - ...?)
Slow Stoch gave buy signal (bullish), Price trying to break above Kijun Sen (bullish if succeeds), Chikou Span is above Price (bullish).
Price testing the Kumo Cloud (neutral), MACD is flat (neutral), ADX is super low (no trend, no momentum) but DMI seems to cross bullish maybe.
The only thing I don't like is that strangely Tenkan/Kijun cross looks like a sell signal. We have to wait and see if it gets invalidated.
4 Hrs time frame: Price is in a thick Kumo Cloud, which means we will likely see some consolidation, rangebound trading and thus a pull back from 0,8825-0,8850 to 0,8790 - 0,8800. Slow Stoch downturn supports the pullback as well. I don't know if a pullback would stop at 0,8790. Some bears may try to push it even lower, but there will be the major trend support at 0,8760 as well.
DMI is very choppy, can not read it, especially with this low ADX.
All in all I think USDCHF has likely built its bottom and will do a bullish breakout and reversal within a few weeks, until mid may. My bias is bullish, and will try to buy it on dips. Given the 4 Hrs chart setup, I don't think we have to rush. I'd wait for first entry target around 0,8795. I will try to build longs in smaller sizes and in more clips downto 0,8755, and will massively size it up whenever I see a bullish breakout on 4 Hrs, and especially when I will see the trend and Kumo break on the daily chart too! Initial stop will be relatively lower, below 0,8700. But as it is a longer term, strategic trade idea, the risk/reward ratio will be very good. I think this long position can develop into one of the best trades of the year, but we will need extreme patience for next few weeks, and we must be very precise with timing and accurate on position sizing.
I will give you updates and some Options trade ideas as well early next week.
Have some fun until, chill out, relax and enjoy Easter!
