USD/CHF: Forex Currency Trading System – May 13, 2014

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USD/CHF: Forex Currency Trading System - May 13, 2014

USD/CHF: Forex Currency Trading System - May 13, 2014

USD/CHF forex currency trading system setup has made a strong rally after bouncing off support on its 4-hour range. The pair has been moving sideways between the .8750 minor psychological level and the resistance around .8925.

The forex currency trading system setup rally could be cut short once the pair tests the top of the range with stochastic already deep in the overbought zone. A selloff from .8925 could last until the bottom of the range or until the middle at .8825 to .8850.

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Forex Currency Trading System Setup

Shorting at .8925 with a tight 50-pip stop and a 175-pip target to the range support could yield a 3.5-to-1 return on risk. Adding another position at the middle of the range and trailing the stop could improve the reward ratio for this forex currency trading system setup.

There are no reports lined up from Switzerland today but the US has its retail sales data on tap. Analysts expect to see a 0.6% increase in headline retail sales and a 0.5% uptick in core retail sales. Weaker than expected figures could lead to a quick dollar selloff, as this might lead some to worry that the US economic recovery isn’t as strong as expected.

On the other hand, stronger than expected retail sales data might spur dollar buying and possibly an upside break from the resistance. Take note that the recent jobs data from the US economy has been significantly stronger than expected and that this is likely to lead to higher consumer spending gains.

As for Switzerland, the franc has been weighed down by SNB rhetoric lately. The Swiss central bank has reiterated its pledge to defend the EUR/CHF peg by selling large amounts of their currency in order to keep its value low. After all, a stronger franc might wind up hurting Switzerland’s export industry as it makes the products more expensive in the international trade scene.

To contact the reporter of the story: Marco Roemer at marco@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.