Going Long USD/CHF on Greenback Strength

USD/CHF on Greenback

Good morning forex friends! 

I'm starting off my trading week with an idea to ride the recent strength in the US Dollar. Will risk aversion continue to push traders into the Greenback this week?

Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms.

 In the 15m chart above, it's pretty clear to see that USD/CHF has been rolling higher as the US Dollar has benefited from the return to risk aversion in the last week or so.

 Weak Swiss and European data was just released on the forex calendar, as well as a weak Spanish bond auction earlier today. It's not looking good at the moment to put risk back on, so I'l be in favor of the Greenback in today's session.

Now, going back to the chart above, it looks like stochastic is indicating overbought conditions, so I will jump into USD/CHF long on a pullback to the day open/previous week high just above .9300. My stop will be below Friday's low and my profit target will be just below the next major psychological level of .9400. Here's what I am going to do:

Long USD/CHF at .9310, stop at .9250, profit target at .9390

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Risk Disclosure.

This trade setup gives me around a 1.3:1 potential return-on-risk, and because it is a short-term trade, I'm only risking 0.50% of my account on it.

Of course, with so many different issues around the globe, sentiment can shift on a dime. Be sure to follow me on Twitter and Facebook for updates and adjustments in case we see a sentiment change.