As a change to looking only at USD pairs, this week I’m going to go through the process of choosing one pair that I feel will give me the best value to start the week.
By chance, the first chart I looked at was EUR/CHF 6hr below. As can be seen, price has visited the lower band where I expect it to bounce to some degree, maybe back to the dashed line in the middle.
So I went looking at other CHF pairs, the most obvious being USD/CHF. Although a new all time low was made, price is not at an extreme point and could go down more. Based only on the 6hr chart below, no trade idea jumps at you.
So far two obvious trades jump out at me: long both EUR/CHF and AUD/CHF. To choose one of them I’ll look at AUD/EUR to tell me which. Treating the chart the same as the others price is at support so I’d expect AUD to strengthen v EUR.
So if the Aussie is expected to rise versus the Euro then long AUD/CHF will be the best trade. This will be the first trade Monday after any gap trades. If AUD/CHF gaps down then I’d consider that a bonus for longs and enter on open. If it gaps up I’ll place long order at gap fill.
I haven’t looked at any GBP pairs only because I feel it will remain weak after the official possibility of further QE in GB so offer less value.
Of course every support can break rendering the trade and this analysis useless. That’s where a well placed stop will become most useful