U.S. Session Brief- A Look At The USD/CHF

Posted Wednesday, August 9, 2017 by
Shain Vernier • 2 min read

As mentioned earlier, the U.S. equities open would be a key for today's session. Initial buying in S&P 500 futures was a positive sign, as was the relatively flat open for the DJIA. Amid the scuttlebutt from the past 24 hours, it looks like U.S. markets are somewhat rational. Of course, that can change in a heartbeat.

Trading today will be interesting as news players take macro positions based on the current geopolitical situation. We are likely to see considerable chop, so money management will be crucial.

When in doubt, stay out. At the very least keep the stops tight.


Economic Data

Here is today’s batch of U.S. economic stats:

Event                                                 Previous       Projected       Actual

MBA Mortgage Applications                -2.8%             N/A             3.0%

Nonfarm Productivity (Q2)                    0.1%             0.7%           0.9%

Unit Labor Costs (Q2)                           5.4%            1.2%             0.6%

None of these numbers are market movers, but a few did beat expectations. It seems like every data release facing the U.S. market for August has been positive. Perhaps the market will get tired of positive metrics?

As I discussed yesterday, the coming months will be trying for the U.S. economy.


If You Must Make A Trade

Today we are seeing news-driven trading, so many of the rules go out the window. "Safe haven" is the phrase of the day. So, let's take a look at the USD/CHF.

Daily Chart USD/CHF-Play Off Of The SMA?

A few technicals:

  • Convergence of technical indicators is a great thing. On the daily time frame, we have the 38% retracement, midpoint of the Bollinger Bands, and the 20-Day EMA within 10 pips. This is a big level, watch for intraday consolidation here.

  • The 13-Day SMA on the daily chart is at .9575, a nice round number. This is ideal trade location for a long, but I doubt we get there today.

Bottom line: The USD/CHF has taken a pounding overnight due to the news out of Korea. If you are going to hold longs today, make them cheap. Lock in with a tight risk/reward around 1:1 and buy in around the SMA at .9575 or the topside of the technical convergence level at .9644-50.

At either entry, this is a counter-trend play. Keep the targets tight and watch for more news!

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