USDCHF Rips a DIBS on BOE/ECB Day

On a day when the newsflow calendar is focused on the GBPUSD and the BOE update (12 noon UK Time) and the EURUSD and the ECB update (12:45 UK time and press conference later in the day), the good old USDCHF stages a breakout from consolidation by breaking up through a DIBS signal bar.

DIBS signal a way of triggering a consolidation breakout: USDCHF’s DIBS bare was a nice one at 15pips of range with a low-spike on it, it was preceded by a few spiking candles showing that bears were getting rejected. Interesting to see how in a trading session characterised by some rangebound pre-news anticipation action in the EURUSD and GBPUSD, the USDCHF staged a solid breakout from consolidation. The initial 40-pip pop on the hourly bar is pretty solid in the context of the 15-pip DIBS signal and in the context of USDCHF’s average daily range stats (USDCHF ranges on average 90-100pips a day per www.mataf.net). Given the DIBS is a breakout trade it’s important to try and go for winners that are multiples of the pips being risked so that when the market is in chop mode the DIBS triggers will get banged up a bit.

Other CHF pairs showed DIBS clues as well: A good tip sometimes is to track a few pairs on the same cross to see if they print a DIBS candle simultaneously. In the case of today’s USDCHF DIBS on the 1H chart, there was a DIBS that signalled on the GBPCHF 1H chart and on the EURCHF M30 charts at roughly the same time.

It’s a Thursday and there is scheduled newsflow: it’s not entirely surprising when a DIBS works out decently on a Thursday. I find Thursdays can often be decent trending days, helped by the fact there tend to be important scheduled news releases that can get the market to be eager to anticipate news or set it up to produce a reaction with some good follow through to it. For the GBPUSD and EURUSD, the “interest-rate decision Thursdays” sometimes produce a good DIBS signal AFTER the news has been released.

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