The recent breakout in the USDCHF currency pair has confirmed a strong bearish bias. The medium-term bullish corrective cycle that started in December 2023 has completed, leading to a continued decline in the pair. This bearish sequence is about to break below the second low, indicating a clear downward trend. Analyzing the weekly chart, it is evident that the price completed the supercycle 4th wave in December 2016, starting wave (V) from that point. Wave (I) of (V) has seen completion of various sub-waves, with the last leg – wave ((5)) of I – expected to break below the December 2023 low.
Utilizing Technical Analysis
To effectively monitor the bearish development and trade along with the downward movement, traders need to focus on detailed technical analysis. Zooming in on the H4 and H1 charts can provide valuable insights into potential trading opportunities. Identifying key support and resistance levels, such as the 0.9029-0.9101 range, can help in pinpointing potential reversal points. Selling bounces at strategic levels can maximize profit potential and minimize risks associated with trading against the trend.
By closely monitoring wave patterns and identifying key reversal points, traders can execute profitable trades in alignment with the overall bearish trend. Selling the bounces on both the H1/30Mins and H4 charts can capitalize on the downward momentum of wave ((iii)). The current sharp decline in wave (i) of ((iii)) presents trading opportunities for wave (ii) in 3, 7, 11 swings at strategic levels indicated by proprietary analysis. Remaining sellers and avoiding buying positions until the bearish cycle is over can ensure consistent profitability and risk management in trading the USDCHF pair.
Trading in the direction of the trend is a safe and profitable strategy for navigating the volatile currency markets. Adhering to the principle that “the trend is your friend” emphasizes the importance of aligning trading positions with the prevailing market direction. Avoiding countertrend trading and focusing on selling opportunities in the bearish cycle of USDCHF can enhance trading success and overall profitability. By deploying effective technical analysis and strategic execution, traders can optimize trading outcomes and capitalize on the potential of the USDCHF currency pair.