Welcome to this week’s newsletter!
WILL THE CHF STRENGTH CONTINUE?
In this week’s newsletter we are going to investigate at a strong currency against a weaker currency. We do this to identify a trending opportunity in the market.
Last week the Swiss Franc weakness completely flipped with the currency dominating against most of its counterparts.
This combined with our recent analysis of the USD seasonal weakness could combine to a downtrend forming on USDCHF.
The recent price action on USDCHF shows that the price found resistance at a major supply zone at 0.9450. The price then closed near the recent swing lows suggesting we could see the trend reverse here.
If the price is going to form a downtrend, we would like to see a lower high form, and if the price were to retrace back to the 0.9360 zone we could be setting up for a head and shoulders pattern.
Checking out the volume levels and the demand zones we can see multiple opportunities forming. The demand zone sits just below between 0.9200 and 0.9187 which could be tested this week offering us a short-term trading opportunity.
If the price retraces back to the minor resistance and high-volume level at 0.9300 we could see another move lower into the demand zone.
Alternatively, we would like to see a daily retracement back into the key zone at 0.9360.
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