On June 23 we asked your opinion in the interesting pattern in this poll, the USDCHF pair was drawing in the 4H chart.
The pattern was interesting because the overall bias was to the upside, but the pair made a drastic correction back in June from 1.0014 down to 0.97, then it recovered in a five-wave impulse that started on June 25 and ended on July 19. The final stage was a wedge or pennant-like descending pattern.
Yesterday, June 24 the pattern was resolved to the upside, then it retraced to touch the upper trendline. Finally, today it has drawn a couple of bullish candles with high volume.
A long position is possible with a target at SF 1.00 or slightly below this level and an invalidation level of 0.983. This potential trade shows a 3:1 reward-to-risk ratio.
This, of course, is a theoretical scenario, not a recommendation to trade. You should evaluate this potential setup for yourself and use propper position sizing, according to your balance. Most of the professional traders don’t risk more than 1% of their total balance on every trade and never hold more than 6% on open positions.
Please also note that dollar-related trades are heavily correlated, so when adding another USD position to it, you should consider it. In that case, it is wise to look for long and short USD simultaneous positions to offset the dollar risk. That can be accomplished by looking for who’s strongest and who’s weakest against the dollar and take an opposite dollar stance for these trades ( buy the strong and sell the weak or vice-versa, of you think their prices are overextended).