The Greenback Grinds North-Key Levels For The USD/CHF

Posted Tuesday, March 20, 2018 by
Shain Vernier • 1 min read

Today’s action has been solid for the USD across the forex. With Jerome Powell and the FED getting ready to take center stage, the markets are bullish on the buck. It appears traders are excited about the upside potential of holding Greenbacks in the short-term. When it comes to the USD/CHF, risk is on.

At press time, the CME Fedwatch index is estimating a 94.4% chance of a 25 bps hike tomorrow. With such heavy odds in favor, shouldn’t current pricing reflect the certainty of higher rates? Obviously not — even safe haven currencies such as the Swiss franc are losing value against the USD.

USD/CHF Technicals

It is trend day up for the USD/CHF, posting a 35 pip gain and intraday high above the .9550 handle. The Swissie looks to be in the process of testing .9600.

USD/CHF, Daily Chart
USD/CHF, Daily Chart

It may seem to be an elementary point, but there are only two technical levels worth watching in the lead up to the FED. Here they are:

  • Resistance(1): Psyche Level, .9600
  • Support(1): Psyche Level, .9500

Overview: Price has tested and rejected .9500 at some point during each of the last three sessions. Clearly, .9500 is attracting buyers when available, promoting a short-term bullish bias.

In addition, .9550 is attracting heavy two-way action. It is a possible settlement area for today’s session. Traders will be at ease holding .9550s either to the long or short going into the FED announcements. Liabilities will be limited and a directional move on a FED rate hike or surprise will produce favorable risk/reward scenarios.

For now, this is a wait and see market. Tomorrow’s 2 PM EST announcements are going to dictate USD/CHF valuations for the remainder of the week.

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