USD/CHF: Bullish Candlestick Confluence
USD/CHF Daily Candle Chart: Inside Day Follows Bullish Hammer
USD/CHF has been carving out a bullish series of higher swing lows since the turn of the year – creating an upward sloping trendline on the daily candle chart.
Having surged higher earlier in the month, price action during the last week has seen USD/CHF retrace and consolidate within a series of tight sideways candles. This has created a platform for a bullish breakout to occur in-line with the current uptrend.
On Thursday 22nd February USD/CHF formed a Bullish Hammer Candle – signalling a clear appetite to ‘buy the dips’ and this has potentially formed a new inflection point from which a steeper trendline can be drawn.
The day after, USD/CHF consolidated within the range of the Bullish Hammer Candle – forming a small Inside Day pattern. This pattern is powerful as it builds tension within the market and potentially sets the scene for an explosive breakout.
USD/CHF Daily Candle Chart
Past performance is not a reliable indicator of future results
USD/CHF Hourly Candle Chart: Anchored VWAP Wedge
Zooming into the hourly candle chart highlights the intensity of the recent consolidation phase.
Interestingly, if we anchor a volume weighted average price (VWAP) to the February highs and the Hammer Candle lows we can see that the market is being ‘funnelled’ into the apex of wedge pattern.
The hourly timeframe can be used to time entry and manage risk:
Timing Entry: A break above the Inside Day highs would signal the resumption of USD/CHF’s uptrend. It would confirm the Bullish Hammer Candle, trigger an Inside Day breakout, and signal the breakout from the anchored VWAP wedge.
Managing Risk: There are multiple areas for stop placement on this trade setup, but a stop below the Inside Day lows offers attractive risk/reward for swing trading – the VWAP anchored to the hammer candle lows makes for a dynamic trailing stop. In terms of profit targets, the February highs is a logical initial target, secondary targets could use a measured move of the early-February rally.
USD/CHF Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
USD/CHF has been carving out a bullish series of higher swing lows since the turn of the year – creating an upward sloping trendline on the daily candle chart.
Having surged higher earlier in the month, price action during the last week has seen USD/CHF retrace and consolidate within a series of tight sideways candles. This has created a platform for a bullish breakout to occur in-line with the current uptrend.
On Thursday 22nd February USD/CHF formed a Bullish Hammer Candle – signalling a clear appetite to ‘buy the dips’ and this has potentially formed a new inflection point from which a steeper trendline can be drawn.
The day after, USD/CHF consolidated within the range of the Bullish Hammer Candle – forming a small Inside Day pattern. This pattern is powerful as it builds tension within the market and potentially sets the scene for an explosive breakout.
USD/CHF Daily Candle Chart
Past performance is not a reliable indicator of future results
USD/CHF Hourly Candle Chart: Anchored VWAP Wedge
Zooming into the hourly candle chart highlights the intensity of the recent consolidation phase.
Interestingly, if we anchor a volume weighted average price (VWAP) to the February highs and the Hammer Candle lows we can see that the market is being ‘funnelled’ into the apex of wedge pattern.
The hourly timeframe can be used to time entry and manage risk:
Timing Entry: A break above the Inside Day highs would signal the resumption of USD/CHF’s uptrend. It would confirm the Bullish Hammer Candle, trigger an Inside Day breakout, and signal the breakout from the anchored VWAP wedge.
Managing Risk: There are multiple areas for stop placement on this trade setup, but a stop below the Inside Day lows offers attractive risk/reward for swing trading – the VWAP anchored to the hammer candle lows makes for a dynamic trailing stop. In terms of profit targets, the February highs is a logical initial target, secondary targets could use a measured move of the early-February rally.
USD/CHF Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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