Yesterday’s candle produced a potential swing low at the inital retracement target and is building a case for a swing trade long.
The Swissy has finally reverted to the mean and produced a Bullish Engulfing candle (comparing the bodies, not the entire range) at 0.956 support to suggest a swing low has formed.
However there are several levels of resistance around 0.974 which may continue to hold for the foreseeable future whilst the USD Index continues to correct. Therefor to increase the potential reward/risk ratio I would only be looking to enter with a limit order, upon a retracement towards support levels.
0.9620 house the Daily Pivot and also an area that has been both support and resistance, so is an obvious level to consider. However I also find that Daily Pivots in particular are prone to lots of market noise so I have no reservations of entering below this level to increase R:R with a stop well below the 0.9560 support zone.
Initial target is 0.9700 and 0.9704 where I’ll include a trailing stop in case we do see an upside breakout to new highs.
A break below 0.956 invalidates the setup where a deeper retracement towards 0.950 can be expected.