The Aussie and Canadian Dollars have both had “safe haven” buying support since the Cyprus situation emerged.
The Aussie: Swiss Franc pair recently broke through channel resistance and the Canadian Dollar could now follow suit.
AUD: CHF – Daily
CAD: CHF – Daily
The strategy outlined on the chart is only one way of handling this situation. It involves:
- Buying using a stop entry order if price breaks above the channel resistance and gets comfortably clear of it.
- Placing an initial stop below support back within the channel represented by the dashed red line
Of course, the other alternative is that this resistance may be respected with price again bouncing off it. If that happens swing traders may be prepared to sell with a close stop looking for a retreat towards the channel support.
If we get a buy setup, I’ll post a follow up with some thoughts on setting profit objectives and trailing the stop higher. In the meantime the Tracker Order ticket below shows one approach to the buy strategy outlined above.