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

On the Daily chart above, we would observe that on Friday, last week, price hit the upper edge of the upward or bullish channel, and on the same day, it reversed sharply to close as a strong bear-bodied candle. That was a convincing sign that the bulls weren’t prepared to disregard the upper boundary of the bullish channel just yet. Further supporting the possibility of a bearish move toward the lower part of the bullish channel is earlier price action today, which resulted in the break of the previous trading day’s low – Friday’s low @ 1.0747 (not highlighted). Consequently, from a day-trade perspective, our bias has shifted in favor of the bears.
However, considering price’s proximity to the lower edge of the bullish channel (currently about 50pips away), there’s the need for us to be cautious as we seek Short trade opportunities – especially when we also consider that the USD/CHF currency pair is currently within a medium term bullish trend.

On the H4 chart above, price has breached the most recent swing low @ 1.0746 (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 notice price is yet to break decisively below the 1.0746 support level, and the last fully formed H4 candle completed the formation of a quasi-reversal candle pattern around the same support level. Hence, we have a sign suggesting a possible bullish retracement.
In all, while our day-trade bias supports the bears, we should be conscious of the contradictory signals.
The white horizontal line @ 1.0897 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, in case of a clearer coast, 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.