Five Of The Same Corrections In A Row
Alpari Research & Analysis | Nov 24, 2016 06:33AM ET
That situation does not happen too often and from my experience is rather reserved for the pairs with NZD, not CHF. USD/CHF in the recent after-Trump upswing was having four, almost identical corrections in a row! This is how the history likes to repeat itself in trading!
When trading corrections, we should obviously look first at the depth, not length and that is what we are focusing on here. Second one was a bit deeper and third one a bit smaller but the principle stays the same. What is more, we are now having chances for the 5th one! So far we retraced around 30 pips from the top and we are on a good way to reach an important support (green area).
Guess what, 65 pips mark (grey rectangle) is on the same level as the horizontal support created by the tops from the last four trading days (1.0122). Will the same story happen one more time? Well, with every next bounce, chances that it will be continued drop but it is still worth considering.
Trend here is definitely positive. Those corrections might be the great opportunity for the short term scalpers. Long-term traders also should focus on the long positions but they should not abandon their bullish view once the 5th correction will be a bit deeper.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.