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Forex Trade Signals Aug. 9th USDCHF
There was a day where the traders I used to work with would never have imagined USDCHF hitting parity. Those days seem like ions ago and make me feel old as a trader. But here we are and now the USDCHF is trading at barely above .7250. How the world has changed.
With that being said, there is an important question as to whether the CHF has had its rally and is bouncing or still has more room to go.
First off, it should be noted when there is panic selling in the markets, that shortly after its common to see a rebound of sorts. But we are not certain the CHF pairs are done selling off. We actually feel they still have room to go and here’s why.
AUDUSD, NZDUSD, $DJIA, SPX, and Oil all sold off massively over the last few days, but also bounced and are holding towards the 4hr 20ema, passed it, and also way off the lows, for example;
AUDUSD – roughly 400pips off the lows (4%)
NZDUSD – roughly 360pips off the lows (4.3%)
$DJIA – approx. 750pts off the lows (7.1%)
SPX – approx. 100pts off the lows (about 8.5%)
But if you look at the charts below, you can see USDCHF and EURCHF are 142pips (1.9%) and 290pips (2.9%).
With that being said, if we had to pick, we’d chose the USDCHF which is weaker off the lows and considering Bernanke’s comments, nobody wants to be owning dollars now. Thus, we prefer the USDCHF.
In terms of where to get in, since we still prefer shorts, we’d rather wait for a good pullback to the 7400 or 7500 levels before we get back short with stops just above the big figure at 7500 and first targets set for just above 7100 while holding for further losses should it show vulnerability. Ultimately we do not feel this run is over but there may be a mild pullback which we look at as opportunities to get short again.
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