USDCNH Trade Idea Based on Consolidation Breakout at Potential Support

Cory Mitchell, CMT

The USDCNH is consolidating near the March 20 low of 7.0678. If the consolidation breaks to the upside, it could signal a rally to the 7.14 region. That's where a falling trendline intersects the price. 

With a long entry on the hourly chart near 7.0850 (will vary slightly by broker), and a stop loss just below 7.0688, the trade provides a close to 3:1 reward-to-risk ratio. 

A downside breakout of the consolidation is also tradable, but more likely to result in a false breakout. Therefore, I am giving the downside breakout less room. If the price breaks out the bottom, and then moves back into the consolidation, I will close the trade for a tiny loss. If it continues to run to the downside I'll be looking for a target near 7.02. 

By Cory Mitchell, CMT. Join me in my free Facebook swing trading group.

Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.

Comments (1)

We did get a couple false breakouts, and then ripped to the target.

Forex Trade Ideas