That's one way of looking at things. However, in addition to it being only one piece of evidence, one can make an opposing argument rather easily. For example, look at RSI. It's a nice uptrend line. Even better, since the 2008 low, RSI hasn't gone into oversold (below 30). It hasn't dropped below 37 on the price dips. That's important. One would expect the much despised currency to have significant downward momentum. It isn't doing that. It also means there is positive divergence. There has also been positive divergence on the daily chart. RSI levels and divergence is only one piece of evidence as well. So is there anything else? One could argue that the pair is basing although the pullback from 1.0066 was a bit steep. On the USD Index chart, one can use an EW count on the monthly chart to show that the pair is beginning a third wave up. This would result in USDCHF going up as well.
All this is to say, that one has to examine several pieces of evidence to determine a trade direction. Most readers of this blog probably don't trade off monthly or even weekly charts because the stops have to be wider in most cases. But one should be aware of the overall picture even if trading is carried out on a daily (or shorter) chart.
Here's a monthly chart. My trades don't show on the monthly charts since I use a different charting package for weekly and monthly charts.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFztRTVpTDTZvYHnk4uPcKXo6BQuui5bRg2PLV4nmxY1RCCbgK9xApr0p35W1QLrpR16bp2NUoMcv3Ka3ZhGh3d91ffw070-K2Lzk_KAz3EL-cXJo1DdK5dJTzaOiYHXC2zj2VzEiNayc3/s400/20101208+UChf+30Y+M.png)
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
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