A number of the swing trades discussed this month are still ongoing or setting up. Here’s an update on them: USDCHF, EURCAD, NZDJPY, GBPJPY, EURUSD, and USDMXN.
Let’s start out with USDCHF. This trade idea was discussed on Aug. 7. It is still hovering near a long-term support level. It has had a couple of false breakouts. I am still long, eyeing a move back up toward the descending channel with a target just above 0.96.
There is still the possibility of a breakout to the downside. That wouldn’t result in an imminent trade though. I would wait for a specific setup before entering.
This trade was discussed on Aug. 10. There was the uspide possibility, but the downside possibility seemed more likely with the price having the sharp reversal off resistance. The resistance level goes back to 2016.
One entry was discussed in the article. This was followed by a couple of other pullbacks and moves back to the downside. The pair is still trying to work its ways toward the 1.52 target.
The price has rallied back and is re-testing the resistance area. If the price consolidates again (even on a 4-hour or hourly), that could present another entry opportunity.
Before jumping in on the short side, I want to see a significant false breakout on the upside, or continued waning momentum on the upside. That will also likely give us a solid RSI divergence which can act as a confirmation signal if a price-action trade setup develops. This was all discussed back on Aug. 14.
The EURUSD is near a descending trendline extending back to 2009. On prior visits of the trendline, the price has typically peaked its head above before declining. The price is struggling to move higher right now. Each attempt to rally this month has been met with quick selling.
On August 18, the last time I wrong an article on the EURUSD, a consolidation did develop and broke to the downside. That scenario was discussed as a trade opportunity. The pair is currently chopping around between 1.1850 and 1.1750 (rounded), with a big false breakout to the upside today. This looks like it is setting up for more downside.
The short-term downside target is 1.1720. Obviously, if looking at a longer-term trade, there is potential for a lot of downside if this is a reversal off the long-term descending trendline. I am not confident in that assessment yet, so I am not interested in a long-term trade at this time.
Now it is a wait-and-see game whether the price consolidates again and provides a possible trade near the descending trendline.
Day Trading More Your Thing?
There were four very similar setups in the London session on Aug. 27: 3 winners and 1 loser. There was at least one other early in the US session, and then another toward the London close. All winners. Can you spot them?
By Cory Mitchell, CMT @corymitc.
Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.