Buying The USD/CHF: Key Level At .9579

Posted Thursday, August 10, 2017 by
Shain Vernier • 2 min read

Safe-haven assets have certainly been a hot trade this week. As I mentioned during yesterday’s session, the USD/CHF is coming into an interesting technical area. Geopolitics and economic data are going to drive the Swissie for the next 24 hours. How do we trade it?



Like I said yesterday, when technical levels come together to form support and resistance, good things are likely to happen. The long from the convergence zone is still technically valid. A stop under yesterday's low is a good out while we look for a better entry.

Currently, the USD/CHF is trading dead center of yesterday’s key area:

USDCHF DailyWednesday’s USD/CHF Daily Chart

Of course, moving averages update in real time, so here is where those levels stand today:

USD/CHF DailyUSD/CHF Daily Chart-Setting Up A Long With Great Trade Location

There are a few important technical levels to be aware of:

  • Currently, we are trading above last session’s low at .9611

  • The 20 Day EMA has been updated to .9647

  • Our 13 Day SMA now stands at .9579

  • Key support areas beneath current trade are the 50% retracement at .9605 and 62% at .9565

In addition, tomorrow’s CPI releases for the U.S. will drive more participation to the market. The 8:30 AM EST release of the data is likely to bring some of our key levels into play.

The Trade: We are seeing compression in our convergence area. The best course of action is to let the market shake out and wait for an optimal entry.

Going long from the 13-Day SMA is the best long entry on the board. A buy at .9579 with a stop under the round number of .9550 gives a 1:1 ratio on a return to .9604. One can also put a 2:1 ratio in play, and look for an intermediate term rally back towards topside value at .9529.

It is unlikely that we get our price today during the U.S. Session. I look for the trade to go live during the European session or on the U.S. CPI release tomorrow.

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