Today on USDCHF – Daily and H4 charts support Short trades, but…

On the Daily chart above, yesterday, we discussed the possibility of a bearish retracement based on a couple of price actions that were unfolding. By the close of yesterday’s trading hours, it became more obvious that the bears were prepared to take over as yesterday’s candle closed as a bear-candle – though not a strong one. Furthermore, yesterday’s price activity, in relation to Friday’s, resulted in an “inside-candle” reversal candle pattern: a significant reversal indicator since it occurred at the upper edge of an upward or bullish channel, after a steep bullish trend. To further compound issues for the bulls, current price action has seen price break below previous day’s low @ 1.0682 (not highlighted). Consequently, from a day-trade perspective, our bias has turned bearish.
However, there’s a critical support level we have to be conscious of as we seek our daily Short trade set ups on the Hourly chart – supported by the H4 chart: the most recent Daily swing high @ 1.0641 (which we’ve highlighted using the blue broken line).

On the H4 chart above, price has breached the most recent swing low @ 1.0682 (which we’ve highlighted using the blue broken line) downward. That automatically shifts our bias in favor of a downward price move. However, we could observe that, though price broke below the 1.0682 support level, which is “acting” a dual role as the most recent H4 swing low and the previous day’s low, price is yet to break decisively below it (the 1.0682 level). It would be preferable to see an H4 candle close below this support level to more convinced of a further bearish retracement.
The white horizontal line @ 1.0794 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.