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USD/CHF Countertrend Day Trade (May 6, 2014)
USD/CHF has been moving inside a falling trend channel for the past week, as dollar demand has remained weak while Swiss economic data have shown improvements. The pair just came off a test of the channel resistance and underwent a sharp selloff to the channel support.
At the moment, the pair is moving sideways in tight consolidation, waiting for more clues from economic data. An upside break from the box pattern could confirm that rallies are about to happen and might last until the top of the channel around .8825. On the other hand, a sharp downside break could go below the support level and indicate that further losses are in the cards for USD/CHF.
A straddle setup might be the best way to play this pair for now, as top-tier data from the US could dictate where price action could go. US trade balance is due today but the bigger mover could be Yellen’s testimony in Congress during tomorrow’s US trading session.
By Kate Curtis from Trader's Way
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