Marc Principato, CMT
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Marc Principato, CMT in Marc Principato, CMT - SMB Capital,


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USDCHF is coming off a major resistance around the .8870 area.  I am watching for setups that will validate a swing trade short.
The .8870 area is a major trend retracement level which also has historical significance. (See previous swing high early March). Price has already shown signs of selling off this level again. This opens up the possibility for two swing trade short setups.

Setup1: Watch for price to retest the .8870 area and offer validation for short entry.  This can appear in the form of bearish price structures on a smaller time frame such as an hourly chart.  Or watch for bearish candlestick reversals. Upon validation, I would look for price to push back into the .8760 area which can take a day or two at the current rate of movement. If price pushes above .8930, this long scenario would be no longer in play.

Setup 2: Price pushes extreme resistance around .8910 area and then shows a bearish reversal for validation. If price fails off of this area, I would look again for the same target around .8760 area and measure risk from .8930. 
Since this pair is generally weak, it is not unreasonable to hold onto a small portion of your position and see if price reaches a more aggressive target such as the .8650 area.
Technically, this pair offers more potential on the short side and expectations should be managed accordingly.  If price breaks higher instead and closes above a key resistance such as .8930 area, then these bearish ideas will no longer be in play.