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I’m going to get started this week on the US Dollar versus the Swiss Frank [USDCHF]. Look here, at the Daily Chart, over the long-term, going all the way back to July of 2013, top left-hand side of the chart, this currency pair has been in a downtrend. That’s not too hard to see, as we fell from the top left-hand side, into the mid-0.9700s, all the way down here towards the bottom, in towards the 0.8700-level. So, long-term downtrend.
Over the past several weeks, we’ve seen a little bit of a change in the price structure of this currency pair. Within the downtrend, we have seen lower highs and lower lows. And now, over the past few weeks, we’ve seen a little bit of a change, where we’ve seen a new higher high. We could see that right here. As it broke through the high here, into the 0.8850s, continued to move higher, and we’ve seen higher lows as the market has continued to pressure higher.
Not only that. We saw the break of the blue trend line, which was easily seen as it pushed through the mid to low-0.8800s. We’ve also, over the past few weeks, been studying this 100-period or 100-day moving average here on the Daily Chart. That green line that you see here on the Daily Chart is a 100-day, simple moving average, and we saw a couple weeks ago, where the market pressured above that moving average.
Well, the last time we got above here, we could see that over here into January, it was just a short period of time, held above the moving average and then got right back below it, used it as resistance and continued the downtrend. Well, so far, we have seen the market holding above that 100-day moving average and above the resistance. So, if it continues to stay above there, we’ll look for further bullish movement and the potential continuation of a change in the trend, which went from a downtrend to an uptrend.
So, break of the blue trend line, higher highs, higher lows, and we’ve seen the hold above the 100-day moving average. One other thing here on this chart, and I’m going to actually zoom it in on the Daily Chart, so we could see this a little bit easier. Taking Fibonacci from the high now. The high sitting here at 0.9150 or so, down to the current lowest low on the chart. So, high to low with Fibonacci, 50% retracement level is 0.8926. That’s right here in the middle of the blue-shaded area, and we could see over the past several days holding above that 50% retracement level.
Not only holding above that. We are now holding above this last resistance high right back here into early April. The next Fibonacci retracement level is right here into the pink zone. The .618 fib sits right around the 0.8980-level. Right around the 0.8980 is where that .618 fib is, and that’s at the top of the pink zone. So, this is our congestion zone. We’re holding congestion between the blue-shaded area, which represents its last resistance and even some support over here on the left-hand side. The pink-shaded area, which is our current resistance, but you follow it back in time and you see support, resistance, and resistance and support all along that pink zone.
So, pink zone: resistance. Blue zone: support. 50% retracement level. .618 retracement level. 100-day moving average. All of those giving us a clear clue that we should be focused on the bull side, looking at support here in the blue-shaded area, resistance into the pink-shaded area. So, let’s talk about our expectations for the day today. We’ve already talked about resistance here. We can see the .618 fib there. The pink-shaded area as support and resistance. We’ve already talked about support right here, above the 100-day moving average. 50% in the blue-shaded area. Last resistance high.
What we’re looking for today is a breakout, and really could be over the next couple of days. A breakout above the pink zone, and we’ll call it above the 0.8980, 0.8985-level, that .618 fib and that pink-shaded area. If we can get above the pink zone, we’ll target back to the orange zone. If you follow it back to the left-hand side of the chart, you can see once it got above the pink zone, it went to the orange zone. So, that orange-shaded area becomes our next resistance, all the way up here into the 0.9030s, 0.9040s, and 0.9050s. That also happens to be where the .786 fib of that previous downtrend is, right here into the 0.9057-level.
On the other side, if we ever see the breakdown of this blue zone and specifically the breakdown of that 100-period or 100-day moving average, we’ll likely look for the reversal and a turn back down in the direction of the longer-term downtrend. One last thing here on the Daily Chart. The Forex Black Book trend bar at the very bottom of the chart remains bullish, remains in a buy bias right now. It is green, so that’s the direction we’d be focused on. Buying on dips into support. That’s good news because support is the blue-shaded area. 100-day moving average. 50% from the previous trend range. All of that giving us reason to believe buying into the blue zone is the main focus for the day, looking for the break above the pink-shaded area.
Let’s take all of that information down to the 4-Hour Chart. And as we get down here to the 4-Hour Chart, it’s not going to give us any new information. I don’t think. It just gives us kind of a more detailed view of this currency pair. I’m actually going to zoom it out one time like this and it’ll give us a little bit of a more detailed view and we can see a little bit more detail about the history.
You follow it along back in time. You go all the way back here. The bank flow levels have been bottoming the market or giving the market some support. You could see over here, the market was challenging into the bank flow levels. Gave it enough support. Started the rally higher. The bank flow levels have continued to follow along as the market continued to rise higher here for the USDCHF. We have not seen, over the past couple of weeks, any sell levels here for this currency pair. No sellers in the market. No sell bank flow levels. Only buy levels.
Now, we didn’t get bank flow levels yesterday with the bank holiday. I suspect when we get our bank flow levels today, they will be similar to what they were the last levels we got, or a little bit closer to this blue-shaded area, where our current support is. One last thing I’m going to do here on the 4-Hour Chart. I’m going to take Fibonacci from the current low that we see right down here into the green-shaded area at the very bottom of the chart.
Take Fibonacci from that low to the current resistance high. In doing that, we find the .236 fib at 0.8907. So, anywhere within that blue zone. Anywhere from the 50% from the previous daily range, 0.8926, down to the .236 at 0.8907, potential to find support and rally back higher. So, buying on dips into this zone, anywhere between 0.8900 and 0.8926, I think, is a buying opportunity, targeting back to the pink zone or higher. Break underneath there, probably stay out of buys at that point, looking for it to fall back down towards the 0.8860s and 0.8870s and the purple-shaded area that sits down here, closer where last week’s bank flow levels are.
Selling right now not really part of the scenario for me, but if you decide you think selling is the best opportunity for you, there’s really only two reasons to sell it. Rally to the pink zone is your resistance. Selling underneath there, targeting the blue zone or underneath the blue zone, target back down here towards this purple-shaded area becomes your best target if you decide to sell it. I’m focused in on the buy side. Buying the blue zone or the break above the pink zone. The only other thing to do would be potential short-term intraday sells there into the pink-shaded area for the USDCHF today.
