USDCHF 12-17-06

12-17-06

USDCHF

There was an opportunity to trade the first trade from Friday's email which was a breakout trade above 1.2155 early on Friday. The short trade at 1.2226 was also possible on the rally from the area of demand at 1.2114. I forgot to mention trading the 1.2123 - 1.2114 pullback trade, but the picture in the email from Friday shows the area. What you are looking at is a currency trying to absorb the area of supply at 1.2226 for a move higher. If there is too much supply at 1.2226, the USDCHF will sell off to the breakout area at 1.2193. I will let the USDCHF trade in this narrow range for a day or two while the moving average catches up to the trading range. I would not buy a pullback to the breakout area at 1.2193 since the area of supply at 1.2226 is so close and the USDCHF is at the wrong end of the curve for a long entry.