U.S. Forex Overnight Preview: Levels For The Swissy

It is good to be back in the saddle for another year of forex market action. Today is the first full trading session of the post-holiday season. The markets look to be getting back to normal, featuring substantial volatility and participation across the majors.

As we get deeper into January, the economic calendar will heat up. This is a welcomed sight for active traders, in comparison to the doldrums of the holiday season. Here are the key economic events for the U.S. overnight and pre-market hours:

Country                                          Event

E.U.                                                 Consumer Confidence (Dec.)

Germany                                         Unemployment Rate (Dec.)

U.K.                                                 PMI Construction (Dec.)

U.S.                                                 Redbook (Dec. 29), MBA Mortgage Applications (Dec. 29)

The major news items for Wednesday’s session will be the U.S. ISM Manufacturing and Construction Spending numbers. In the event that these reports surprise market participants, look for more volatility in USD valuations.

USD/CHF Technicals

The last month has shown a considerable recovery made by the Swiss franc against the U.S. dollar. A pronounced downtrend for the final week of 2017 illustrates this new found strength.

Under normal conditions, the Swissy has a tendency of falling into extended periods of tight consolidation. This has not been the case lately, as pricing of the USD/CHF has fallen out of bed with conviction.

Bottom Line: It is becoming a theme across the majors, but on the daily timeframe there are not many support and resistance levels to choose from. However, there is a nice short retracement play that may come to pass for the Swissy in the near future.

Selling the 38% retracement level of the current selloff from .9774 is a solid way to get in on the recent downtrend. Placing the initial stop at .9808 while implementing a 1:1 R/R management plan will produce over 30 pips profit.

If you take this recommendation, be sure to trade smart and manage your leverage wisely!