USDCHF 24.09.2018 28.09.2018

This week USDCHF is making a textbook example of pullback inside an uptrend, we are talking about cot data.

“During a correction from a prevailing uptrend, +40 point in movement in the Cot Index within a six-week period often marks the end of a corrective pullback, and the resumption of the major uptrend”(BRIESE, 2008, p.76)

Surge in Movement Index

We are in a very interesting point in USDCHF because we should consider the resume of an uptrend or a Trend change for the downside. “The failure of a +-40 point in Movement Index signal to restart prevailing trend is a tip-off to a major trend change” (BRIESE, 2008, p.76)¬†

“A failed signal is among the most reliable of all charts signal. When Markets fail to follow through in the direction of a chart signal, it very strongly suggests the possibility of a significant move in the opposite direction”(SCHWAGER; ETZKORN, 2017, p.205)

So right now we are at that point where the stop loss is the cheapest possible because we are in a turn/continuation point. Let’s see what options are telling us:

25D Risks of Reversal

Well, options are telling us the same story COT data, that the easiest path is to the upside. So we prefer Buying USDCHF!

SNB in their latest communications reiterated their commitment to devaluing the Franc and this should keep USDCHF downside limited.

How we trade TOTW, from entry to management and exit. Is all communicated in private members group.

GOOD LUCK TO US ALL

LEO HERMOSO&MIAD KASRAVI

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