Earlier, the structure on USDCHF was bullish and broke out from the resistance level at 0.9330. After the breakout, there was no confirmation for the continuation up and the market broke in, back below the resistance level. In this situation, we will be waiting for the market to retest the resistance once again in order to take our short positions. Till now, market has formed a new lower low, but awaiting the confirmation for the new lower high, at the resistance level.

There was an ascending trendline, which was broken out for sells with a full bearish candle. Now that it has been broken, we will have to wait for the trendline or resistance level retest. Apart from this, for a better confirmation, we can also wait for the lower time frame trendline breakout sell.

The retracement level of a golden level of 75-78.6% is in confluence with the resistance level. Since the breakout sells has been triggered, it will be part of the breakout strategy for the market to retrace till the Fibonacci golden area.

Both the EMA’s are currently in a bullish trend, appearing with a bullish death cross. Right now, USDCHF is nearing the break of the EMA 50. Once it’s broken, we can confirm the bearish structure, but we won’t take any position until unless market retests the resistance level. The EMA 200 is still below the support level, which is considered as our profit target. At this support level, EMA 200 may be in confluence with the level which would book our profits.

RSI is at 44 and CCI at 34. RSI is in the bearish region where as CCI is in the bullish region. Both the oscillators are diverged right now. Once at the resistance, we will look at two options: either the oscillators form bearish divergence or, market slides down below the neutralized levels.

We will wait for the market to retest the resistance level in order to take the shorts. If market manages to break above, we will manage our risk, and consume the stop loss.

USDCHF shorts from the resistance

Oct 01 2021

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