The USDCHF has reversed it previous attempt to move higher after it touched its 200 DMA as visible in this D1 chart. This currency pair has now retraced back down to its very strong horizontal support level from which we expect another attempt to move higher and breakout above its 50 DMA as well as 200 DMA and back into its horizontal resistance level.
MACD continues to show improvement as it approaches the histogram as well as moving average continue to approach the centerline. We expect a bullish centerline crossover to occur during the breakout above its 50 DMA as well as 200 DMA. RSI is trading in neutral territory after it broke out from oversold conditions.
We recommend a long position at 0.9175 with a potential second entry level at 0.9000. We also recommend a stop sell order at 0.9075 in order to hedge the initial long position and before adding new long positions to this trade.
Traders who wish to exit this trade at a loss are advised to place their stop loss order at 0.9075. We will not use a stop loss order and execute this trade as recommended. Place your take profit level at 0.9475.
Here are the reasons why we call the USDCHF currency pair higher
- The USDCHF has reversed its previous move higher after touching its 200 DMA and retraced back down to a very strong horizontal support level
- The last four daily candlesticks suggest that this currency pair is building a bottom around current levels
- MACD continues to show improvement and the histogram as well as moving average are approaching the centerline
- RSI is trading in neutral territory after completing a breakout from oversold conditions
- New institutional long positions by swing traders
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