Free Profitable Forex Newsletter
Hey! This is Philip with this week's trade idea of the Free Profitable Forex Newsletter!
With EURCHF At These Levels, CHFJPY Is An Attractive Sell
With the major pairs all in relatively tight ranges, we are turning to the CHFJPY cross as an interesting opportunity. The pair has been trading in a downtrend for a while and is currently near the resistance trendline of the bearish trend.
SNB Interventions Favor Lower CHFJPY
Looking at the relative fundamentals, with EURCHF at these levels (currently around 1.0850), CHFJPY looks like an attractive sell, mainly because the Swiss National Bank (SNB) will likely remain active and intervene against CHF strength versus the Euro ( EURCHF pair). Levels below 1.1000 in EURCHF are already worrying the Swiss central bank,
and further moves to the downside are only likely to motivate even stronger action/intervention by the SNB.
SNB interventions should, therefore, keep CHF on the weaker side, especially against other safe heavens. Hence, the Yen is likely to remain stronger than the Franc in either a risk-off or a risk-on environment. This narrative favors lower prices on CHFJPY just as the technicals do.
Clear bearish channel on CHFJPY; Currently trading near resistance
Considering EURCHF and EURJPY technicals separately, there is a greater likelihood of EURJPY continuing further lower than EURCHF doing the same.
The CHFJPY chart looks particularly attractive. The pair is trading in a clearly defined bearish channel, and the current price is close to the resistance trendline.
One warning sign in contrast to the overall bearish picture is perhaps today's (Thursday) rather bullish candle. However, since the price is still below resistance, the downtrend remains intact and additional bearish signals that appear here would be valid opportunities to enter short.
Also, be mindful of the CHFJPY usual price behavior of gradual trends with many retracements. That is, this pair often forms candles with large wicks on both ends even during trends. So, just because a bullish candle has appeared within a downtrend doesn't necessarily mean that the bulls are gaining control of the trend. Without a clear bullish breakout, the downtrend remains valid.
Look to enter as close as possible to the falling trendline, especially if the price rallies toward it again.
It's possible that CHFJPY could even pierce this trendline on an intraday basis (above 109.00). But, without a daily or rather even a weekly close above it, the trendline resistance will not be broken. Hence, such situations of the price moving above 109.00 could actually provide excellent selling opportunities.
Instances of higher volatility could occur on CHFJPY any US-China trade news or news related to Brexit and EU politics/economics. However, the overall theme that the JPY has more room to strengthen than CHF remains in place, mainly based on the critical levels in EURCHF as described above.
- Near the resistance trendline
- You can also place a pending sell trade near the resistance trendline in the 109.00 area
Stop loss:
- Above the resistance trendline. Maybe even above 109.50 to allow greater breathing room for the trade.
Targets:
- 1st: The previous lows at the 107.00 area
- 2nd: The support trendline of the channel (currently in the 105.00 area)
Trade signals from the past week
- September 23, 2019 - Short GBPUSD from 1.2450, 1st target reached at 1.2340 - 1.2365 area, (1.2350 actual exit) = +100 pips profit; trade signal sent on Friday, September 20
TOTAL: +100 pips in the past week
TOTAL: +1765 pips profit since October 1, 2018
Start Copying Successful Traders
On eToro, you never trade alone. Connect, share strategies, and discuss the markets with millions of users. Use the patented CopyTrader™ feature to automatically copy top-performing investors in real time and achieve stable profit.
You can now follow the traders who achieve 73% success rate on average (measured out of 124M copied trades) - copy top traders and turn their experience to your advantage!
If you have any questions or feedback, don't hesitate to reply to this email.
Thank you!
ALSO DON'T MISS! EVERY MONDAY:
High Risk Warning: Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Any opinions, news, research, predictions, analyses, prices or other information contained in this newsletter is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
|
|
|
|
