Davos Kicks Off: Key USD/CHF Fibonacci Level

Posted Monday, January 22, 2018 by
Shain Vernier • 1 min read

Tomorrow marks the beginning of the World Economic Forum in Davos, Switzerland. Every year, the financial heavy hitters gather in the Swiss Alps to discuss global economics. This year’s meeting has drawn a record number of business leaders, as topics from Bitcoin to geopolitical uncertainty will be formally addressed.

In the spirit of Davos, let’s take a look at a trade setup for the Swissy.

USD/CHF Technical Outlook

Early 2018 has not been a good period for the Greenback. Daily action in the USD/CHF clearly illustrates the trader and investor hesitance toward to holding the USD instead of equities or safe-haven assets.

USD/CHF, Daily Chart

Over the past several weeks, the USD/CHF has fallen out of bed. It seems like just yesterday we were trading near par value. Since the November highs of 1.0037, the bears have taken full control of the Swissy.

Here are the key levels to watch for the remainder of the U.S. session:

  • Resistance(1): 38% Retracement Current Bear Run, .9653
  • Resistance(2): 20 Day EMA, .9711
  • Support(1): Psyche Level .9550
  • Support(2): Swing Low, .9535

Bottom Line: For the fifth-straight session, the Swissy has entered a consolidation pattern. With price rotating around the .9600 level, investors seem to be hesitant to enter this market.

A short from .9650 with an initial stop at .9691 is a solid way to enter this market with the prevailing trend. In the event that this trade is elected, there will be chances to adjust stops and take profits while the position is open. To begin with, a take profit of 40 pips is a reasonable expectation.

Be sure to check back for tips on how to maximize the upside of this trade while limiting risk.

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