Want FULL ACCESS To
ROSS’ DAILY TRADE ROOM?
Simply Click The Get Started Button Right Now!
Transcript of Video
Click Here to receive an email alert when Ross posts a new daily video
I’m going to get started today on the US Dollar versus the Swiss Frank [USDCHF]. Starting on the Daily Chart, of course we can see that this currency pair has been in a downtrend for quite some time. We start all the way up here, top left-hand side of the chart, in the mid-0.9700s and we have fallen all the way back down here to the bottom right-hand side of the chart into the 0.8700-level.
Several weeks ago, going back into mid-March, we challenged this low right around 0.8700. Unable to break through that level. We bounced all the way back up here, challenging the blue trend line right around the low-0.8900s, 0.8925, 0.9830, or so. Made another fall back down into the 0.8700s, another challenge of the blue trend line, and once agin we are challenging the historic lows into the 0.8700-level.
It’s my expectation today though, as long as it stays above 0.8700 and the green-shaded area at the bottom of the chart, we look for bounces on support and potential rallies back to resistance, the yellow zone, or possibly even the blue trend line and the purple-shaded area. If, of course, we break down through the green zone, we’ll look for a continuation lower.
Let’s go ahead and zoom in a little bit here on the Daily Chart. Get a closer view of these same levels. There’s the yellow zone. There’s the green zone that we just mentioned as our support and resistance, and the purple-shaded area just above there along with the blue trend line. Forex Black Book trend bar is red, and it turned red over the past few days, as the market has been bearish.
So, if you’re going to trade in the direction of the longer-term trend and the red trend bar with the Forex Black Book, of course you want it to go up. You want it to rally into resistance to find a price ceiling where the market starts to turn back down in the direction of the trend. Remember: buy low, sell high. So, if you’re looking to sell in the direction of the trend and the Forex Black Book, you prefer it to challenge to resistance. Yellow-shaded area between 0.8757 and 0.8775 is that yellow zone. That becomes your first potential resistance. Historical support here help us identify that as a resistance.
The secondary resistance of course, if it breaks through that yellow zone, would be back up here towards the purple-shaded area and the blue trend line. So, if you’re looking to sell Forex Black Book direction and the direction of the trend these become your opportunities to do so. One last opportunity to potentially sell this of course would be a breakdown of the green zone. So, there’s your three opportunities to sell the USDCHF today. Under the green zone, challenge resistance into the yellow zone or the purple zone.
Now, if you’re on the other side of the fence and you think: “Well, it’s had such a difficult time breaking through this low at 0.8700 that you think it’s time for reversal and time to buy this currency pair, I mean the last time we were here into 0.8700, we made a run all the way back into 0.8900s. So, not unexpected that we could see support and reversal here for this currency pair. If that’s going to happen, most likely what you’re looking for are buys on dips into support. And at this point, that would be the green-shaded area, down around 0.8700, 0.8720. That green zone becomes your support to buy from.
The other side of that, if it never challenges again, and we’ve already saw that yesterday. We saw the challenge of 0.8720. Bounced off it. Now back into the 0.8740s once again. So, if you did take a buy yesterday, you’re already seeing a little bit of profit. Otherwise, you’re looking for the break above the yellow-shaded area. If it can get above what is right now our resistance, between 0.8757 and 0.8775, that is our current resistance. If it gets above there, of course we’ll look for the challenge back to the purple zone, similar to what we saw over here. We saw the challenge of the green zone, back above the yellow zone, back to the purple, green, and blue-shaded area. Bounced on the yellow zone. Went back to the purple zone.
So, again, if it gets above the yellow-shaded area, back to the purple-shaded area, and the blue trend line becomes our target. So, yellow and green-shaded areas are our main areas to watch for today on the USDCHF.
Let’s go down to the 4-Hour Chart. Now, as we get down here to the 4-Hour Chart, it just gives us a little bit of a zoomed in view of the currency pair. Gives us a little bit more detail to what we’re doing here. And as soon as it pops up here, I’m going to squeeze it back out. There is our green-shaded area. There is our yellow-shaded area. And we can now also see the bank flow levels here from yesterday.
Yesterday’s bank flow levels bottoming out here, so during the Trade Room yesterday, we discussed the fact that as long as it held above the green zone and these bank flow levels, you might be looking to buy this currency pair. 0.8720, 0.8725, 0.8735. And if you decided to do that, you’re now seeing 20 to 25 pips of profit, depending on where you would’ve entered, as it challenges back here to 0.8750. You should be protecting profit now, because we are likely looking at resistance during the intraday here into the yellow zone.
Red trend bar. Red arrow. Actually, I don’t think it’s gone high enough to see a red arrow yet. I think it would have to probably go all the way up here to the purple-shaded area before we’d see a new red arrow with the Forex Black Book. So, intraday resistance, yes, here in the yellow zone, could send it back to the green zone. Break above the yellow zone, the purple zone becomes our next area of interest.
Bank flow levels over the past several days have implied bullish support or buying support here for this currency pair. As long as that holds true, we’ll likely look for a turn back up every time it dips into support. Scroll it back just a little bit. You see, over here on the left-hand side, a similar scenario, where we challenged the green-shaded area, bank flow levels gave it support, and then it started that reversal and rally back higher again.
Just taking that a cue, we bring it back to the current time. There’s our bank flow levels. There’s the green-shaded area. Staying above it, likely looking for reversal. If you’re looking to buy it, that is your best opportunity, into the bank flow levels and into support, or likely a break above our current resistance. I don’t think any of that will change as we go through the day today, but definitely watching for support, reversal, breakout of resistance to go higher or resistance and selling in the direction of the trend for a continuation for the USDCHF today.
