Jan. 23rd – USDCHF

We were expecting a recovery here, but I am not satisfied with the depth of it right now, particularly when RSI has not produced a Negative reversal. I would prefer to see a larger pullback before committing to the downside so we can reduce the risk.

NOTE: The corrections after a diagonal are typically deep and fast. However, I have observed that in currencies this guideline does not seem to apply. In fact, I often see very shallow corrections after a diagonal in FX.