USD/CHF testing major resistance, remain bearish
Sell below 0.9991. Stop loss at 1.0040. Take profit at 0.9923.
Reason for the trading strategy (technically):
Price is testing major resistance at 0.9991 (Fibonacci retracement, horizontal overlap resistance, bearish divergence) where we expect a reaction from for price to drop to at least the 0.9923 support (Fibonacci retracement, short term horizontal overlap support).
Stochastic (55,5,3) is seeing major resistance below the 91% level and also displays bearish divergence vs price, signalling that an impending reversal is coming.
Reason for the trading strategy (fundamentally):
The main news event driving USD today is the U.S. ISM Manufacturing survey. It is one of the biggest market moving economic releases because of its Prices Paid and Employment subcomponents which reflect sentiment towards inflation and labor conditions - two of the market's most significant health indicators. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD. We’re expecting forecasts of a decrease which means a bearish USD is expected, this goes in line with our bearish USDCHF strategy view.
Reason for the trading strategy (technically):
Price is testing major resistance at 0.9991 (Fibonacci retracement, horizontal overlap resistance, bearish divergence) where we expect a reaction from for price to drop to at least the 0.9923 support (Fibonacci retracement, short term horizontal overlap support).
Stochastic (55,5,3) is seeing major resistance below the 91% level and also displays bearish divergence vs price, signalling that an impending reversal is coming.
Reason for the trading strategy (fundamentally):
The main news event driving USD today is the U.S. ISM Manufacturing survey. It is one of the biggest market moving economic releases because of its Prices Paid and Employment subcomponents which reflect sentiment towards inflation and labor conditions - two of the market's most significant health indicators. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD. We’re expecting forecasts of a decrease which means a bearish USD is expected, this goes in line with our bearish USDCHF strategy view.
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