USD/CHF: Avoiding a false dichotomy

The US dollar is in a correction of its uptrend (see EUR/USD, GBP/USD, AUD/USD etc)

Do we really face a linear option of fade or no trade?

Actually, it might be a false dichotomy.

Going long EUR/USD and GBP/USD (i.e. selling USD) would mean fading the major trend (as per the weekly charts).

But going short USD/CHF (i.e. also selling USD) would not be a counter trend trade because USD/CHF is in a trading range. Selling below resistance in a trading range is a high probability setup.

We can see the topping process on the daily chart, with 0.90 as the broken neckline.

Here the risk is well defined - if the price pops back over 0.90 - the breakdown trade is no longer on but while below 0.90, 0.88 is a natural target as the last major support area and the 30 week moving average.

But - as always - that’s just how the team and I are seeing things, what do you think?

Share your ideas with us - OR - send us a request!

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cheers!
Jasper