New Trade Alert: CAD/CHF Rally Hits Key Resistance

Last updated 2/11/2010 1:57 PM EST (GMT -5) 9 Comments

FX360 Technical Analyst Staff

Technical Analyst, GFT

It may seem a bit ludicrous selling into such a bullish surge; however, the recent CAD/CHF rally has just hit 78.6% weekly resistance in addition to a bearish 8hr butterfly pattern. The confluence of Fibonacci-based resistance near 1.0225 may not necessarily halt bullish momentum, but the odds of at least a temporary correction are high. As a result, we're short from 1.0220 with stops at 1.0258. Initial profit target of 1.0117 sits just above the 38.2% correction of the most recent 8hr rally (beginning at midpoint of CD leg). Considering this is a counter-trend trade, we will look to move the current stop of 1.0258 to break even once prices dip below 1.0200. An extended target of 1.0009 may come into play depending on price action prior the initial target of 1.0117. Keep in mind that this trade has a higher chance of being stopped out due to all the bullish momentum, but the risk/reward is excellent which is key. As always, our focus is on consistent risk/money management which is critical to long-term success especially within this methodology.

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Comments (9)

NeoFX

February 11, 2010 at 06:56 PM ET

Roger,

the last 8hr candle on this chart is over 150pips long. why isn't this qualifying for a trade invalidation alert?

I thought long candles like this on may be signs of continuation patterns.

any comments?
thanks
R

rstojsic

February 12, 2010 at 06:55 AM ET

yes, but this particluar pattern was already at the 161.8% abcd extension (which is the most extreme abcd extension) in addition to the longer term weekly resistance in addition to XA resistance with good price/time symmetry. so even though the odds of winning are less (as mentioned) because of the long bar warning sign it still offered an excellent risk to reward.

pipchaser

February 12, 2010 at 06:50 PM ET

in the future I will refrain from taking Roger's trade recommendations...Last three, to include this one were all losers..Where Brad's were winners...

margaret

February 13, 2010 at 04:24 AM ET

Hey Pip Chaser in reference to 2 of the last 3 trades posted by Roger: NZD/JPN 2/8/2010 was a text book perfect WINNING trade and the EUR/NZD was invalidated. The best thing you can do is ead all of Brads FX360 training posts.
Good luck with your trading!

NeoFX

February 13, 2010 at 01:12 AM ET

lol.man if you think you could judge a trader's performance and knowledge based on last 3 losses---even if they were consecutive----then I'd refrain from trading if I were you.

just a thought

Houston Jake

February 14, 2010 at 11:03 AM ET

Amen! How rude?! Thanks for your insight roger!

Houston Jake

February 14, 2010 at 11:04 AM ET

Amen! How rude?! Thanks for your insight roger!

Oded

February 15, 2010 at 03:03 AM ET

I think its also important to review the correlation.
USDCHF hit the 50% of the previous move. If it will honor it and will go down it can support the CADCHF for short.

USDCHF - if goes down and look like it can "help" that other CHF pairs go down and CHFJPY go up.
I am looking at the USDCHF for short as well for correction only. Hope to see a deep correction and after that a long term long on this pair.
See what today will bring to us with the US holiday

Oded

Oded

February 15, 2010 at 03:06 AM ET

For Pipchaser-
what you wrote is very unappropriated. You have to read and learn and not act like a Parrot.
And even this is what you think, you are on the wrong stage.
Good luck

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