Monday Afternoon Forex Report: Valid Resistance For The USD/CHF
Shain Vernier • 2 min read
Earlier in the session, strength in the USD brought the topside resistance level I outlined for the USD/CHF a few days back into play. Kudos to anyone that grabbed the 25+ pips from the trade recommendation. No doubt, price action from this level will be important to the intermediate-term value of the Swissie.
Staying aware of macro support and resistance levels is a big part of active trading. In this case, the 50% retracement of the yearly range at .9878 proved to be robust resistance.
Monday seemingly always delivers a few surprises and today has been no different. Strength in the USD across the majors has given us some great setups for tomorrow’s trade. The USD/CHF has a couple of upcoming possibilities.USD/CHF, Daily Chart
Many traders view the USD/CHF as being the key measure of the dollar’s worth. I tend to agree with this notion. The possibility of the dollar trading at par with the franc has an important psychological impact and is a sign of greenback stability.
Well, we aren’t at par yet. Here is the technical roadmap moving forward:
Resistance 1, 50% yearly range: .9878
Resistance 2, 62% yearly range: .9986
Resistance 3, Par value: 1.0000
Support 1, 38% of current bull run: .9825
Support 2, 38% of yearly range: .9770
This market is extremely bullish, currently looking to challenge the 50% retracement for the second time. However, the USD/CHF is a grinder. I expect to see sideways action in the coming sessions between .9878 and .9800.
Trade Idea: With such a bullish candlestick formation, I am inclined to go long for the time being. 1:1 risk/reward buys from .9830-.9825 with a stop below .9800 is the trade for now. As long as the intraday high of .9882 remains intact this trade is a go.
From a macro perspective, the yearly 62% retracement is hugely important. Take note of .9986. It is a premium shorting entry and will be on my radar for the rest of 2017. If price approaches this level, check back for ideas on how to profit from the action.