usdchf-h4-20161011
USDCHF H4, Top of a Major Range
usdchf-m15-20161011
Butterfly Pattern, Major Resistance Zone

Technical Analysis: USDCHF is now trading at the top of a major range and may start to reverse and fall.

The price has yet to shown any strong appreciation towards breaking above the major resistance zone, signaling that the price may fail to break higher and start to reverse.

In the M15 chart, a butterfly pattern was formed after price failed to fall further despite 2 minor retracements have completed.

The price went on to retrace even further and thus forming a butterfly within the major resistance zone.

Market Sentiment: The dollar is expected to weaken further due to a disappointing NFP which may dampen bets for a rate hike in December. The effect from last Fridays NFP is usually brought forward to the beginning of the next trading week and thus dollar is still considered slightly bearish.

Trading Plan: Short with 1/2 risk before butterfly pattern proves to be effective.

Stop loss was set 22 pips above the Fibo retracement level 127.2% based on the butterfly pattern.

Once the price has fallen and reaches at least FR61.8% of the current swing, wait for the price to make minor retracement to stack another position.

Modification:
[10/10/16 22:01]
Hit stop loss and exited with maximum initial risk. Price broke above resistance zone.

Results: 1.45% Loss

Learning: The Butterfly Pattern is only considered valid when the final leg reaches at least FR127.2%.