USDCHF 12-7-06

12-7-06

USDCHF

The breakout long trade in the USDCHF happened early yesterday morning. The entry price was 1.1934 which was 1 pip above the moving average, and the exit was at the 1.1983 breakdown area. That 1.1983 area has been tested three times this week and was where we entered a short trade on Monday when it was tested the first time. The small trading range is narrowing and it is nowhere as large as the small trading range in the GBPUSD. The breakout area of demand at 1.1915 and the new breakdown area of supply at 1.1952 is too narrow of a range to trade for me. You are welcome to trade it. I will wait for a day to see if the range is extended. It is possible that the bounce in the dollar may be over if the bottom of the range is extended below 1.1879. The reverse will be true on a move past 1.1983. Since the breakdown area at 1.1952 has formed, I am leaning toward another move down in the dollar resuming.