The Daily Trade – Day 75

Filed under: Learn Forex Trading |

Trade Number 75 – AUD/CHF 1-Hour Chart

For today’s “Daily Trade” trading example, I am going to be looking at the AUD/CHF forex currency pair. This is the pair for the Australian dollar and the Swiss franc (it is one of the less popular forex pairs). And as usual, I’d like to begin by looking at the daily chart for the significant areas of support and resistance (see Figure 1.).

 

Figure 1.

As you can see, there is a very obvious level at the top of the chart which has acted as resistance on five or six occasions in the recent past. This is a level that we should be watching like a hawk on the daily and intraday 4-hour and 1-hour charts. I would not recommend looking at charts with timeframes below these as the signals may be less reliable and the spreads will have more significance.

 

Figure 2.

If you now look at Figure 2, you will see the 1-hour chart for the AUD/CHF currency pair. Here, you will see a nice bearish engulfing pattern that has formed in the green “zone”, which is the area that we are looking at for any price action signals. This is a good time and place to get in on a short trade with a stop loss placed just a few pips above the high of the move. A target of two times your risk would suffice in this situation.

 

Figure 3.

Figure 3 tells the story of the trade. It did not go in our favor right away and it took some time to reach our target. There was some sideways movement but we eventually got there for a nice rise on the bank. That’s it for today, and I’ll be back tomorrow with another forex price action trading example. Until then, happy trading!

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