Breakout Continuation Level – Day Trading The USD/CHF 19/08/2011
We will keep this day trade setup short and sweet. To begin we had a previous support level on the USD/CHF that broke and then became resistance. The market re-tested this previous support turned resistance, and it held nicely. The USD/CHF again began to run down off this level. I want to give credit where credit is due….a member in the forex room pointed out this level to me as the USD/CHF is not a pair I normally watch. It’s nice to see traders taking what they have learned and putting it to good use:)
There was one final support area that I said I wanted to see go which was the .7869 area. It started to work through that and we went short. Overall we took 30 pips off this trade. Someone in the room brought up a good point mentioning the intervention on the Swissy. The reason I was comfortable shorting the Swissy was because of history. Ask yourself this….have you ever seen an intervention in the forex market actually break a trend? Every BOJ intervention on the USD/JPY has failed thus far. Why? When you try to turn the market with only a days worth of order flow you will lose. Unfortunately the BOJ is finding this out and as of right now the SNB is as well. Now that doesn’t mean they won’t eventually weaken the Swissy, but if history has anything to say about it they will have a tough time doing it.
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