Time To Trade The USD/CHF-Macro Resistance Level Coming Up

It is an active morning on the currency front, with the USD posting big gains across the majors. As my colleagues Rowan and Skerdian have discussed at length, the ECB statements were poised to act as a catalyst for volatility during today’s U.S. session.

Sure enough, that is the case, as holding the deposit rate steady at -0.4% and cutting stimulus is shaking up global currency markets. Ensuing price action has sent the EUR/USD south and the USD/CHF north. This development has created some great opportunities for what could be a very nice trading session.

USD/CHF Trade Idea

A trade that I have had on the board for awhile now is a short facing the USD/CHF. During Wednesday’s session, I outlined a few trading options to capitalize upon a macro Fibonacci retracement level.

USD/CHF, Daily Chart

The USD/CHF is currently trading near the big round number of .9950 just off of daily highs. If we continue to see positive price action, the yearly 62% retracement level may come into play during the U.S. session.

Bottom Line

Shorts from .9986 serve as premium trade locations to the bear. As we close in on the dollar being at par with the franc, it is worthy to note the recovery in the USD/CHF over the last month. It looks as though the USD may post a substantial fourth-quarter rally against many of the majors.

Check out yesterday’s trading plan for the 62% retracement level facing the USD/CHF. There are a few different ways to approach this trade, and a bit of nuance depending upon your goals. No matter which option you choose, be sure to keep an eye on your risk management!